Petronas Makes Discovery offshore East Java

Malaysia’s national oil and gas company on Thursday announced a hydrocarbon discovery in the North Ketapang Production Sharing Contract (PSC) area off the coast of the Indonesian province of East Java.

“The Barokah-1 well was spudded on 30 November 2025 and successfully drilled to a true vertical depth subsea of 3,315.3 meters [10,876.97 feet]”, Petroliam Nasional Bhd (Petronas) said in a press release. “Further studies will be undertaken to fully evaluate the well results and determine the discovery’s potential”.

“This milestone complements the momentum of the ongoing Hidayah Development Project from the North Madura II PSC [also offshore East Java], which reached final investment decision in October 2024 following an oil discovery in 2021”, Petronas added.

Petronas operates the North Ketapang PSC with a 51 percent stake. Earthon North Ketapang Pte Ltd owns 34 percent. PT Pertamina Hulu Energi North Ketapang has 15 percent.

Indonesia awarded the PSC 2022. It spans 3,131.8 square kilometers (1,209.2 square miles) with depths of up to 100 meters [328.1 feet] below sea level, according to Petronas.

“The Barokah-1 discovery reinforces the compelling exploration potential we continue to see in the Northern Madura region, East Java”, said Petronas vice president for exploration Ahmad Faisal Bakar. “This encouraging result deepens our understanding of the basin’s prospectivity and strengthens Petronas’ drive for disciplined growth and to mature opportunities that can contribute to East Java’s durable energy landscape”.

Last year Petronas signed a new PSC offshore East Java. The Serpang PSC spans about 8,498 square kilometers, according to a Petronas news release May 21, 2025.

Petronas is operator in Serpang with a 51 percent stake. Japan’s INPEX Corp owns 35 percent, while South Korea’s SK Earthon Co Ltd holds the remaining 14 percent.

Serpang was part of the Southeast Asian country’s Petroleum Bidding Round 2024, under which Petronas also won the Binaiya PSC in Eastern Indonesia.

Binaiya covers 8,484 square kilometers, according to Petronas. PT Pertamina is operator with a 56 percent stake. Petronas owns 22 percent and SK Earthon 22 percent.

Also offshore East Java, Petronas operates the Ketapang and North Madura II PSCs. It also operates the Bobara PSC offshore West Papua and holds participating interests in six PSCs in East Indonesia, East Java, Sumatra and the Natuna Sea.

Recently Petronas and Italy’s Eni SpA signed an agreement to combine their assets in Indonesia and Malaysia into a company equally owned by the state-controlled oil and gas producers.

The independent company, to be called NewCo, would focus on natural gas-producing and development assets including in Indonesia’s Kutei Basin, Eni said in an online statement November 3, 2025. Announcing the prior memorandum of understanding February 27, 2025 Eni and Petronas said the combination would create a “major” liquefied natural gas player in the Asian market.

NewCo will have an initial production capacity of over 300,000 barrels of oil equivalent a day (boed). It will grow its capacity to more than 500,000 boed “in the medium term”, Eni said.

“NewCo will operate as a financially self-sufficient entity, with plans to invest in excess of $15 billion over the next five years”, Eni said. “This investment will support the development of at least eight new projects and the drilling of 15 exploration wells, with the aim of developing approximately three billion boe of discovered reserves. NewCo also aims to unlock an estimated 10 billion boe of unrisked exploration potential”.

The parties expect to complete the formation of the joint venture this year, subject to regulatory approvals. Petronas said the transaction also needs the waiver of pre-emption rights.

To contact the author, email jov.onsat@rigzone.com