In a world dominated by calls to diversify energy portfolios and integrate more renewable energy projects, some nations and energy companies are sticking to their guns and eyeing new upstream oil and gas projects in the near future. Petronas, Malaysia’s state-owned oil company, has kicked off a procurement drive for subsea systems on two upcoming offshore developments. This marks a significant investment drive the company has undertaken to boost upstream oil and gas production over the coming years.
Petronas and its partners plan to start up as many as eight new projects in the coming years
Petronas and its Italian partner, Eni, are set to start up eight new upstream oil and gas projects over the next three years, according to Eni’s CEO. Certain companies in the energy industry opt to form joint ventures or divest holdings to boost opportunities for new and exciting projects. Petronas is taking the approach to form a joint venture with Eni to explore new opportunities in the Asian energy market.
The pair of companies formed a new joint venture recently to combine their South Asian assets and develop new projects as part of a broader investment drive reaching into the billions of dollars. The joint venture will be called Newco, and plans to invest approximately $15 billion in new projects in the coming years, setting the stage for a new era of upstream production in the Asian energy market.
“In the next three years, we are going to start eight new projects based on the existing reserves: four in Indonesia, four in Malaysia. We are going to drill wells to test additional exploration reserves that we can further add value to this project.” – Eni’s chief executive Claudio Descalzi
The new joint venture will be one of the largest in the Asain energy market
The pair of companies has noted that by combining their assets, they will be able to develop their energy projects to reach new production levels and pump a significant amount of resources into new exploration projects in the region. The new joint venture will become a significant presence in the Asian market by combining assets that will result in an initial production base of over 300,000 barrels of oil equivalent per day.
Eni and Petronas have stated that they will be able to increase those production numbers to reach 500,000 boe/d of sustainable production in the medium term. This comes as Eni has developed a new strategy it calls the “satellite strategy.” In it, the company plans to either create several new joint ventures or divest projects to other companies to make room for new projects in the near future.
This new approach has already produced results for Eni, with the company agreeing to create a joint venture with major UK oil and gas producer Ithaca Energy to combine their substantial assets in the United Kingdom, in “a strategic move to significantly strengthen its presence on the UK Continental Shelf.” The new deal with Petronas comes as other energy companies have similar plans in the Indonesian energy market, and the Asian one overall.
Petronas’s investments in the international energy market are producing results
The astonishing $15 billion investment drive comes as Petroans has announced plans to develop its energy footprint in other regions of the world, with the company reaching a major milestone in a South American energy project, exemplifying its strategy for the international energy market. Amid calls to integrate the renewable energy market, which has been growing at an astonishing rate in recent years, Petronas has developed an interesting approach to the global energy market that has already begun to produce results for the state-owned energy company.
