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In a significant move for Southeast Asia’s energy landscape, Malaysia’s national oil company PETRONAS and Italy’s integrated energy firm Eni have announced the formation of a 50:50 joint-venture, referred to as “NewCo,” to develop upstream oil and gas projects in Malaysia and Indonesia. The partners plan to launch eight new developments within three years and invest approximately US $15 billion over the next five years.
Under the binding agreement signed at the ADIPEC conference, NewCo will combine 19 upstream assets—14 in Indonesia and 5 in Malaysia—bringing together PETRONAS’ and Eni’s portfolios, technical capability and regional presence.
Initial production for the new entity is projected to exceed 300,000 barrels of oil equivalent per day (boe/d), with a medium-term target of more than 500,000 boe/d. The reserve base includes about 3 billion barrels of proved reserves, plus an additional potential upside of roughly 10 billion boe from exploration.
Eni CEO Claudio Descalzi described the initiative as a strategic “game-changer” for both companies in the region: “We are going to start eight new projects – four in Indonesia and four in Malaysia – based on the existing reserves,” he told reporters.
The partnership comes at a time when Asian gas demand is surging, driven by countries shifting away from coal-based power and accelerating LNG imports. Indonesia and Malaysia are well-positioned to supply that demand, particularly in sour-gas and deep-gas plays. Descalzi noted that the existing infrastructure—such as Indonesia’s Bontang LNG facility—will be leveraged to shorten time-to-market and reduce development risk.
For PETRONAS, the tie-up allows access to Eni’s exploration and development expertise, particularly in Indonesia’s Kutei Basin, while preserving the Malaysian company’s regional upstream ambitions. For Eni, the venture supports its “satellite company” model of creating standalone, asset-rich entities to accelerate growth.
The joint venture has set a goal to sanction the first tranche of the eight new projects within three years, with drilling of about 15 exploration wells planned.
Both companies are working towards final regulatory and partner approvals in Malaysia and Indonesia, with full establishment of NewCo expected in 2026.
Large-scale upstream programmes inevitably generate significant demand for materials, fabrication and engineering services. The eight new projects will touch on development of new wells, gathering infrastructure, processing modules, and possibly tie-ins to gas export or LNG plants.
Materials and equipment suppliers should note that:
High-integrity steel, clad plates (for corrosion / sour-gas service) and dissimilar metal transition joints will be needed for processing facilities and well-head equipment.
Modular fabrication (compressor modules, wellhead manifolds) will require suppliers with experience in office-to-field execution.
Given the plan to leverage existing LNG or gas-export facilities, schedule pressures will demand suppliers who can deliver on time and adapt to regional logistics.
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Fugo Tech is focused on the manufacturing of clad metal plate and distributes the Stainless Steel, Titanium, Nickel Alloy, Zirconium and other non-ferrous metal pipes, fittings, flanges, and fasteners.
