Final investment decisions are imminent for two major deepwater gas projects offshore Indonesia, operated by Eni and Petronas. The decisions for the Gendalo-Gandang (GeGa) development in the southern Kutei basin and the Kutei North Hub project are expected within days. These projects represent a combined investment of approximately $15 billion, marking one of Indonesia's most significant deals in recent years.

Project Details and Approvals

The Indonesian government approved the Plan of Development for the Kutei North Hub in August 2024. This project will exploit the Geng North discovery, containing 5 trillion cubic feet of gas and 400 million barrels of condensate, along with 1.6 Tcf of gas from the nearby Gehem field. The Plan of Development for the Gendalo-Gandang project on the Ganal production sharing contract was approved two years prior. This project involves developing cumulative 2 Tcf gas reserves via subsea wells tied back to the existing Jangkrik floating production unit, extending its production plateau by at least 15 years.

Development and Investment Structure

A new joint venture company will be formed to manage these projects. This partnership builds upon the existing NewCo joint venture established by Eni and Petronas in November, which plans an initial $15 billion five-year investment. This includes launching eight new upstream projects in Indonesia and Malaysia within three years, with the first phase comprising four projects in each country alongside exploration drilling. The partnership leverages major discoveries exceeding 15 Tcf in Indonesia and a combined 50 Tcf of gas resources across both nations.

Strategic Goals and Impact

The formation of the joint venture is intended to unlock significant gas potential and strengthen regional energy security. By leveraging existing production assets and developing initiatives in the Kutei basin and Malaysia, the partners expect to deliver over 500,000 barrels of oil equivalent per day in the mid-term. Eni has already launched key tenders and tasked Saipem with supplying the floating production, storage and offloading vessel for the Kutei North Hub.