Eni, Petronas Launch Southeast Asian Gas JV

Petroliam Nasional Bhd and Eni SpA have completed the formation of a 50:50 joint venture combining their assets in Indonesia and Malaysia.

"With a portfolio of 19 gas-producing and development assets - 14 in Indonesia and 5 in Malaysia, Searah will start from an initial production base in excess of 300,000 boe/d [barrels of oil equivalent a day], aiming to exceed 500,000 boe/d of sustainable production within the next three years", Eni said in an online statement.

"A $6 billion Revolving Credit Facility has been successfully secured, reflecting the strong confidence of the financial markets to fund Searah’s growth plans, which include a pipeline of expected investment for over $20 billion over the next five years", Eni added.

"These investments will support the development of more than 3 billion barrels of oil equivalent (boe) of discovered resources and unlock multi-billion boe of additional exploration potential".

Claudio Descalzi, chief executive of Italy's state-controlled Eni, said, "Searah reflects our proven satellite strategy that aims at building focused, high-quality businesses that can combine scale, efficiency, and growth, and that are driven by our excellence in exploration and project execution, and our continued focus on technology and innovation. Searah is a strong new entity in Southeast Asia - the first and largest of its kind in the region".

Muhammad Taufik, CEO of Malaysia's state-owned Petronas, said, "The establishment of Searah aligns with Petronas' intensified focus on exercising greater discipline in developing resources coupled with more agile capital deployment as well as stronger emphasis on sustained value creation across the gas value chain".

Last month Eni said a drill stem test (DST) had confirmed the preliminary assessment of about 5 trillion cubic feet (Tcf) of gas and 300 million barrels of condensate in the Geliga-1 discovery in one of the blocks now transferred to Searah, Indonesia's Ganal.

The DST results showed the well could sustain a production rate of around 200 million cubic feet a day of gas and approximately 10,000 bpd of condensate, Eni said in a press release May 7.

"The new discovery is located next to the undeveloped Gula gas discovery, estimated at approximately 2 Tcf of gas in place and 75 million barrels of condensate. Early evaluations indicate that, when combined, Geliga and Gula could underpin incremental production of around 1,000 MMscfd of gas and 80,000 bpd of condensate", Eni said.

Eni said it was expecting to submit a plan of development (POD) to the government "in the coming weeks".

"The POD aims to enable the fast-track development of a third production hub in the prolific Kutei Basin, alongside the Gendalo and Gandang gas project (South Hub) and the Geng North and Gehem fields (North Hub), by leveraging the development concept currently being implemented for the North Hub project", Eni said.

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