Wood Mackenzie: Eni, Petronas JV driving upstream growth in Indonesia

Feb. 28, 2025
Eni and Petronas' proposed joint venture in Indonesia and Malaysia would create a new Southeast Asian major, according to Wood Mackenzie.

Eni and Petronas announced Feb. 27 that they have entered an exclusive memorandum of understanding to progress talks on forming a joint venture holding company.

The proposed joint venture in Indonesia and Malaysia would create a new Southeast Asian major, according to Wood Mackenzie.

The combination of certain upstream assets in their respective portfolios could lead to a standalone, self-funded operation with reserves of about 3 Bboe and production in the mid-term of 500,000 boe/d, said Andrew Harwood, Wood Mackenzie’s vice president for corporate research, Asia-Pacific.

It would likely be focused on Indonesia and include Eni’s interests in the offshore Kutei Basin and Petronas’ stake in the Abadi LNG development. In addition, Petronas could contribute certain production and exploration interests in Sarawak and Sabah.

The company’s largest producing asset offshore Malaysia is the SK316 Block in Sarawak, which includes the Kasawari development.   

“This proposed joint venture is more innovative and broader in scope than the industry anticipated,” Harwood said. "The combined entity would be well-positioned to progress new gas supply and infrastructure projects while also pursuing high-impact exploration opportunities across the region.” 

Over the past few years, Eni has formed similar upstream ventures such as Azule Energy, in partnership with bp; Vår Energi in Norway; and with Ithaca Energy in the UK.

Indonesia could become one of the largest producing countries in Eni’s portfolio by the early 2030s, he added.

 “Managing capital commitments, unlocking new growth opportunities and broadening strategic relationships are the key drivers behind the formation of the new venture," he said. “For Southeast Asia, the creation of a new technically capable and well-funded operator…could be the key required to unlock the region’s significant untapped potential.”