Southeast Asia’s Upstream M&A Market Shifts to Strategic Growth Plays
Southeast Asia’s upstream merger and acquisition (M&A) market is shifting from exits to strategic entries, with $9.6 billion in assets expected to change hands by 2027. Research from Rystad Energy highlights a competitive cycle, as the region transitions from non-core asset divestments to strategic investments. In 2025, around $6.7 billion in assets were sold, a notable shift from 2020-2024, when major oil companies primarily trimmed late-life positions and production-sharing contracts (PSCs). Transaction metrics have risen, with recent deals reaching $9.8 per barrel of oil equivalent (boe) for development assets and over $3 per boe for pre-final investment decision (FID) resources, compared to six-year averages of $6-7 per boe and $1.5 per boe, respectively.
The $9.6 billion in assets is split between energy majors ($3.6 billion), independents ($3.7 billion), national oil companies (NOCs) ($1.4 billion), and smaller sellers. Majors are focusing on core basins and partnering for frontier acreage, while independents seek capital to advance pre-FID discoveries. NOCs are rationalizing late-life assets domestically while exploring entry opportunities elsewhere. Prateek Pandey, Head of APAC Oil & Gas Research at Rystad Energy, emphasizes that the next 18 months will be shaped by converting pre-FID opportunities into mega M&A deals and the evolution of deal structures into strategic partnerships.
The growth ambition is concentrated in key basins, with nearly 45 PSCs across 12 provinces holding 2.8 billion boe of net resources. Sarawak, the Andaman Sea, and the Kutei Basin hold the region’s largest pre-FID gas positions, including Lang Lebah, Harbor Energy’s Andaman portfolio, and Eni’s Kutei hub. Vietnam’s Ken Bau, with 3.7 trillion cubic feet of recoverable resources, is the largest resource on offer. The producing slice, though smaller, is highly contested, with Chevron’s stake in the North Malay Basin being a standout opportunity.
While optimism is growing, not all assets are progressing as planned. Eni’s Vietnamese portfolio faced setbacks with dry wells, increasing commercial pressure on Ken Bau and making a farm-out more likely. Inpex’s Abadi LNG project may also see a farm-down to spread development capital. Upward revisions to 2025 totals are expected as more information becomes available.