Malaysian state energy company Petronas said on Tuesday it expects to take one to two years to set up a planned joint venture with Italian energy group Eni on upstream assets in Indonesia and Malaysia.
The companies announced a joint venture framework, moving forward with a pact signed in February that they said can deliver up to 500,000 barrels per day of oil equivalent (boe), combining about 3 billion boe of reserves with an additional 10 billion boe of potential exploration upside.
"Asia has huge, huge potential," Eni CEO Claudio Descalzi told Reuters on the sidelines of the Energy Asia conference in Kuala Lumpur.
"The cooperation between countries, to find synergies and exchange energies and put together resources and competencies, is essential. And that is a very strong example, Indonesia and Malaysia together," Descalzi said.
The asset combination focuses on Indonesia's Kutai Basin, where Eni's portfolio includes developments in the Northern and Gendalo-Gandang hubs, which hold substantial gas reserves.
"The whole idea of having this as a combination is to have an independent entity created in order to be self-financed," Mohd Jukris Abdul Wahab, executive vice-president and CEO - upstream at Petronas, said at the conference.
Petronas has said it was looking to include oil and gas projects in Indonesia's Kutai Basin in the planned joint venture, proposing to swap interests for its assets in Malaysia and Indonesia with Eni's blocks there.
However, Petronas said it would exclude Indonesian assets recently awarded to the company, such as the Binaiya and Serpang blocks.
The companies said they aimed to finalize their agreement by this year-end, with completion thereafter subject to regulatory approvals.
(Reuters - Reporting by Florence Tan and Ashley Tang; Writing by Emily Chow; Editing by Tom Hogue, Clarence Fernandez and Rashmi Aich)
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