Eni and Petronas Set to Combine Upstream Assets in Southeast Asia
Italy’s Eni and Malaysian state oil and gas firm Petronas have agreed to discuss a joint venture that would combine and oversee some of their upstream assets in Malaysia and Indonesia, the Italian energy major said on Thursday.Under an exclusive Memorandum of Understanding, Eni and Petronas agreed to progress detailed discussions on establishing a joint venture to create significant opportunities for growth in Malaysia and Indonesia. A JV is also expected to generate substantial synergies, develop new gas projects, and become a major LNG player in the region, Eni said.The joint venture will combine approximately 3 billion barrels of oil equivalent (boe) of reserves with an additional 10 billion boe of potential exploration upside, according to the Italian major.“The joint venture will focus on investing in new gas development projects, reflecting the companies’ commitment to energy transition and supporting the increasing regional domestic gas demand,” Eni said.Any final transaction will be subject to relevant governmental, regulatory, and partner approvals.In recent years, the Italian major has been pursuing a plan that aims to cluster its upstream activities in a “distinctive growth-oriented strategy”.Last year, Eni said it was considering spinning off some stakes in oil and gas projects in Asia and Africa to have partners for their development while putting aside more money into lower-carbon energy projects.Overall, the Italian energy giant has approached things differently than its peers, attempting to either divest or create joint ventures for international oil and gas projects, while grouping and spinning off some low-carbon projects in a “satellite strategy”. For example, Eni last year agreed with major UK oil and gas producer Ithaca Energy to combine substantially all of its upstream assets in the UK, excluding East Irish Sea assets and CCUS activities, in “a strategic move to significantly strengthen its presence on the UK Continental Shelf.”By Tsvetana Paraskova for Oilprice.com
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