Eni and Petronas launch gas joint venture in Southeast Asia
FILE PHOTO: The logo of Malaysian energy group National Petroleum Limited, commonly known as PETRONAS, is displayed at their booth during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo
MILAN, June 8 : Italy's Eni and Malaysia's Petronas have established a 50-50 joint venture combining energy businesses across Indonesia and Malaysia after signing an investment agreement in November, they said on Monday.
The move is part of Eni's so called satellite strategy to spin off specific assets and develop them separately with the help of a partner.
The new company, named Searah, will start from an initial production base of over 300,000 barrels of oil equivalent per day, aiming to exceed 500,000 boe/d of production within the next three years, the companies said in a joint statement.
It will hold a portfolio of 19 gas-producing and development assets, 14 in Indonesia and five in Malaysia.
"Searah is a strong new entity in Southeast Asia, combining our expertise with that of Petronas to support the development of energy resources in Indonesia and Malaysia, with a strong commitment to environmental protection and local growth," Eni CEO Claudio Descalzi said.
GROWTH PLANS INCLUDE $20 BILLION INVESTMENT
The joint venture will generate significant synergies, particularly in logistics and technology, the two companies said.
Searah has secured a $6 billion revolving credit facility to fund its growth plans, which will include expected investments of more than $20 billion over the next five years.
That will support the development of more than 3 billion barrels of oil equivalent of discovered resources, and unlock additional exploration potential, they said.
The launch of Searah follows the final investment decisions for the Gendalo and Gandang fields and the Geng North and Gehem fields announced by Eni in March.
It also comes after Eni's announcement of the Geliga-1 gas discovery in the Kutei basin, estimated to contain around 5 trillion cubic feet of gas and 300 million barrels of condensate in place.
Eni's satellite strategy has also included the spin-off of its Norwegian business into Vaar, and the creation of Azule Energy with BP in Angola.
The arrangement allows Eni to share investment on specific projects with a partner.
