At ADIPEC 2025, Eni and PETRONAS signed a landmark binding agreement to create a jointly owned upstream company, consolidating 19 assets across Indonesia and Malaysia into a $15 billion investment platform. The move marks one of the largest regional upstream consolidations in recent years, positioning NewCo as a major Southeast Asian producer with over 300,000 boe/d and ambitions to surpass 500,000 boe/d in the medium term.
Regional scale and strategic rationale
This partnership marks a pivotal shift for both Eni and PETRONAS as they integrate portfolios spanning 14 Indonesian and five Malaysian assets into a single, financially independent upstream operator. NewCo will serve as a regional powerhouse with an initial production base of 300,000 barrels of oil equivalent per day, supported by 3 billion barrels of discovered reserves and an unrisked exploration potential of up to 10 billion barrels.
The equal ownership structure gives both companies balanced governance and ensures capital discipline in allocating over USD 15 billion of investment during the first five years. That funding will target eight new field developments, 15 exploration wells, and expansion of high-impact projects in the Kutei Basin offshore East Kalimantan and Malaysia’s prolific offshore producing corridors.
Synergies and operational impact
Eni and PETRONAS are aiming to leverage a combined project portfolio that spans deepwater, shallow water, and onshore gas-producing assets. Together they will unlock efficiency gains across subsurface management, drilling logistics, and shared infrastructure. The merged entity also consolidates procurement and fabrication frameworks across existing contractor bases in both countries, with expected cost savings of 10 to 15 percent compared to stand-alone operations.
Typical EPC spend distribution for NewCo’s five-year investment program is expected to align with regional norms: around 35% for subsea and topside facilities, 25% for drilling and completions, 20% for pipelines and export systems, 10% for power and utilities, and 10% for onshore processing and logistics. EPC opportunities are expected to arise for regional fabrication yards, subsea system suppliers, and pipeline contractors across Indonesia and Malaysia, with leading contenders likely to include Sapura Energy, Brooke Dockyard, McDermott, and COOEC for offshore construction, and Technip Energies and Worley for engineering and project management.
A cornerstone of Eni’s “satellite model”
NewCo will form the latest addition to Eni’s “satellite model” portfolio, which includes Vår Energi in Norway, Azule Energy in Angola, and Ithaca Energy in the UK. These independent, capital-efficient entities allow Eni to retain operating influence while sharing investment and development risk with strategic partners. The model has proved highly effective in accelerating project execution cycles, attracting external capital, and improving returns across complex multi-asset portfolios.
For PETRONAS, the venture provides access to a wider suite of exploration opportunities and a channel to export Malaysia’s upstream expertise into Indonesia’s growing energy sector, while supporting local content and sustainability goals.
Path to closing and future outlook
Regulatory, governmental, and partner approvals will be sought through 2026, with closing targeted before year-end. Once operational, NewCo’s annual capital outlay could exceed USD 3 billion, translating to significant EPC, subsea, and fabrication demand across the region.
Eni CEO Claudio Descalzi called the formation of NewCo “a transformational moment” that will unlock synergies in project development and deliver “over 500,000 barrels of oil equivalent per day in the mid-term.” PETRONAS Group CEO Tengku Muhammad Taufik echoed this sentiment, describing the collaboration as “a milestone for Southeast Asia’s energy evolution.”
By integrating two complementary upstream portfolios under one entity, Eni and PETRONAS have effectively created a regional champion capable of competing with the likes of Pertamina Hulu Energi, MedcoEnergi, and Harbour Energy in terms of production scale and investment capability.
If executed as envisioned, NewCo will not only redefine Eni’s footprint in Asia but could become a model for future upstream consolidations in the global energy transition era.
