Italian oil and gas company Eni and Malaysia’s state-owned Petronas have formalised a binding agreement to create a joint venture (JV) to manage upstream assets in Indonesia and Malaysia. 

The new company, dubbed NewCo, will be equally owned by both companies and oversee 19 assets, with 14 in Indonesia and five in Malaysia. 

Eni CEO Claudio Descalzi and Petronas president and CEO Tengku Muhammad Taufik announced the news at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) event. 

The agreement builds on a framework agreement signed on 17 June 2025. 

NewCo aims to leverage complementary portfolios and expertise to enhance long-term value and operational efficiency, while contributing to the energy transition. 

The JV will invest more than $15bn over the next five years to fund the development of at least eight new projects and the drilling of 15 exploration wells to unlock around three billion barrels of oil equivalent (bboe) in discovered reserves. 

It also plans to tap into an estimated 10bboe of un-risked exploration potential. 

The new entity will integrate gas-producing and development assets from both countries, initially producing more than 300,000 barrels of oil equivalent per day (boepd), with a target to increase output to over 500,000boepd in the medium term. 

Eni said that NewCo will be a part of its satellite model strategy, similar to its other ventures, Var Energy in Norway, Azule in Angola and Ithaca in the UK. 

The transaction is expected to be completed by 2026, subject to Eni and Petronas securing regulatory, governmental and partner approvals in Malaysia and Indonesia. 

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 500,000boepd 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.”