Eni, binding agreement with Petronas for newco in Indonesia and Malaysia

After an initial agreement was signed last June outlining the general scope of the integration, Eni and Petronas have come full circle with the operation that will lead to the creation of a new company to which their respective upstream assets in Indonesia and Malaysia will be contributed. The binding agreement between the two groups was signed in Abu Dhabi during Adipec, one of the most important trade fairs in the energy world, in the presence of Eni CEO Claudio Descalzi and Petronas Chairman and CEO Tengku Muhammad Taufik.

The agreement follows, as mentioned, the framework agreement and enables the launch of a new entity that will manage 19 assets, of which 14 in Indonesia and 5 in Malaysia, with the result of expressing, Eni and Petronas underline, significant business value. With the newco, the two groups will pool complementary portfolios, technical solidity and in-depth knowledge of the region, with the aim of creating long-term value, guaranteeing operational excellence and assuming a leadership role in the energy transition.

The newco will operate as a financially self-sufficient entity, with an investment plan in excess of USD 15 billion over the next five years. This plan will support the development of at least eight new projects and the drilling of 15 exploratory wells to bring into production approximately 3 billion barrels of oil equivalent (boe) of already discovered reserves. The new entity will also have an estimated exploration potential of approximately ten billion barrels of low-risk oil equivalent.The company will integrate a significant portfolio of gas assets in production and development between Indonesia and Malaysia, starting from an initial production base of over 300 thousand barrels of oil equivalent per day, with the aim of growing in the medium term to over 500 thousand barrels of oil equivalent per day of sustainable production.

With the creation of the new company, Eni - which was assisted in the transaction by Barclays as exclusive financial advisor - will be able to accelerate project development cycles and optimise the allocation of capital, while also generating operational synergies in exploration, production and asset management activities. The transaction will also allow Eni to take advantage of growth opportunities both in mature fields already in production and in exploration areas with high potential.

"This agreement represents a transformational moment for Eni. We have joined forces with Petronas to manage assets in Indonesia and Malaysia, generating synergies in terms of assets, expertise and financial capabilities. By leveraging existing production assets and developing major initiatives in both the Kutei Basin and Malaysia, we expect to reach over 500,000 barrels of oil equivalent per day in the medium term," commented Eni's CEO Claudio Descalzi. "This opportunity will lead to significant value creation for Eni, Petronas, Indonesia and Malaysia, thanks to our exploration excellence and proven ability to deliver fast track projects with rigorous financial discipline.