Eni and Petronas ink binding deal for ‘historic’ upstream alliance in Southeast Asia

November 4, 2025, by Dragana Nikše

Two oil and gas giants, Italy’s Eni and Malaysia’s PETRONAS, have signed an investment agreement to establish a regional upstream joint venture company combining some of their upstream assets in Indonesia and Malaysia.

Eni-Petronas investment agreement signing; Source: Claudio Descalzi via LinkedIn

The deal establishes a new entity, NewCo, that will manage 19 assets: 14 in Indonesia and five in Malaysia, representing what the Italian player says is significant enterprise value. It follows a framework agreement from June and a memorandum of understanding from February.

Petronas secures US LNG deal, lays groundwork for regional tie-up with Eni

Business Developments & Projects

NewCo will operate as a financially self-sufficient entity, with plans to invest more than $15 billion over the next five years. According to Eni, this will support the development of at least eight new projects and the drilling of 15 exploration wells, with the aim of developing approximately 3 billion barrels of oil equivalent (boe) of discovered reserves.

Eni’s CEO Claudio Descalzi said: “This agreement is a transformational moment for Eni. We have joined forces with PETRONAS to operate assets across Indonesia and Malaysia, generating synergies across assets, expertise and financial capabilities.

“By leveraging existing production assets and developing material initiatives in both the Kutei Basin and in Malaysia, we expect to deliver over 500,000 barrels of oil equivalent per day in the mid-term. This opportunity will deliver impressive value creation for Eni, PETRONAS, Indonesia and Malaysia, enabled by our exceptional exploration skills and track record of delivering disciplined, fast track projects.”

NewCo also aims to unlock an estimated 10 billion boe of unrisked exploration potential. The company will integrate a material portfolio of gas-producing and development assets across the two Southeast Asian countries, aiming for an initial production base of over 300,000 boe/d and plans to grow to more than 500,000 boe/d of sustainable production in the medium term.

After obtaining necessary approvals, the partners expect the deal to close in 2026. The new business will form part of Eni’s satellite model strategy, following similar ventures in Norway, Angola, and the UK. On the other hand, it is PETRONAS’ first venture into a satellite business model, which the company sees as a major milestone.

President and Group Chief Executive Officer of PETRONAS, Muhammad Taufik, noted: “This historic partnership between PETRONAS and Eni is envisaged to set a new benchmark for more efficient, cost-effective and responsible upstream development.

“Adopting this innovative and proven business model reinforces PETRONAS’ firm commitment to support national and regional energy aspirations, as it paves the way for us to deliver greater and more sustainable value to our customers, host nations, the greater upstream sector, as well as our stakeholders.”

This comes on the heels of another partnership announced by Eni. Late last month, the Italian giant inked a deal with QatarEnergy, which will acquire a 40% stake in the North Rafah exploration block offshore Egypt. Eni will stay on as operator and 60% license holder.