Eni pivots to Latin America and Asia on Hormuz supply risks
Eni's CEO says structural shipping risks in the Strait of Hormuz are forcing major oil companies to permanently redirect tens of billions of dollars in capital toward new mega-projects in Latin America and Southeast Asia.
Eni Chief Executive Claudio Descalzi told a parliamentary committee on Thursday that the global oil and gas industry is fundamentally reallocating its capital. Major producers are actively shifting investments away from traditional hubs in the Middle East and Russia, directing funds instead toward Southeast Asia and Latin America.
The driver is a structural reassessment of Middle Eastern logistics. Descalzi noted that prolonged shipping disruptions in the Strait of Hormuz have forced executives to treat regional geopolitics as a permanent risk rather than a temporary shock. Even if peace is established, Russia and Gulf nations are expected to face enduring supply constraints, forcing a permanent reshaping of global energy trade routes.
For markets, this signals a prolonged elevation in the risk premium associated with traditional crude benchmarks, alongside a surge in capital expenditure for frontier basins. In Southeast Asia, the pivot is translating into a wave of final investment decisions for natural gas. These approvals are expected to lift regional gas output by roughly 18%, providing a new supply cushion for Asian buyers.
Eni is moving quickly to capture this growth. The Italian major and Malaysia’s PETRONAS have launched Searah, a 50/50 joint venture consolidating 19 upstream gas assets across Indonesia and Malaysia. The partnership is designed to drastically scale up regional production, anchored by Eni’s deepwater North and South Hub projects located in the Kutei Basin off East Kalimantan.
Latin America is witnessing a parallel transformation, absorbing tens of billions of dollars in capital to build out mega-export infrastructure. Argentina and Guyana have emerged as the focal points of this boom. Eni and Abu Dhabi-based XRG are currently advancing the approximately $30 billion Argentina LNG export complex in Río Negro province. This facility is being paired with a $1.2 billion, 527-kilometer trunk pipeline currently under construction to transport gas from the Neuquén basin to the Atlantic coast.
The geographic diversification extends beyond the Americas and Asia. Descalzi emphasized that North and Sub-Saharan Africa remain vital anchors for long-term global energy security. Eni already relies heavily on the continent, with Sub-Saharan Africa accounting for roughly 19% of its overall production.
