INPEX, Japan’s largest energy developer, has acquired a stake in a gas field off the coast of Malaysia from French oil giant Total Energies. This move aims to solidify the revenue base until large-scale projects scheduled to begin operation in the 2030s and to accelerate the company’s long-term management strategy, “Vision 2035.”

Background of the Acquisition and Transaction from TotalEnergies

On July 2, 2026, French energy giant TotalEnergies announced that it had agreed to sell its 85 percent stake in Block 2E off the coast of Malaysia to Japan’s INPEX. The transaction amount reached 350 million dollars, approximately 57 billion yen. The interests included an 8.5 percent net interest in the currently developing Marjoram gas field. For TotalEnergies, the aim is to lock in value by selling non-operating assets for which it does not directly manage operations, thereby concentrating management resources on its own operating projects, such as the recently started production at the Jelang gas field in Malaysia. Meanwhile, for INPEX, this presented an excellent opportunity to further strengthen its presence in Malaysia, a major gas-producing country in Southeast Asia. This acquisition aligns with the company’s ambitious goal of developing low-cost, low-emission projects, representing a strategic step toward balancing stable energy supply with decarbonization. The chart below shows the distribution of major projects INPEX is developing around the world.

Characteristics of Marjoram Gas Fields and Significance of Acquisition

The Marjoram gas field is located within Block 2E off the coast of Malaysia and is currently in the development phase toward production commencement. INPEX positions this area as one of its “core areas,” and this acquisition is expected to create synergies with existing surrounding assets. In the energy industry, there is a growing movement to cash out minority interests in remote projects and reallocate capital to assets that can exercise greater operational influence, and this transaction is a typical example. For INPEX, Malaysia is a key hub with a geographical advantage, offering the ability to transport goods quickly to Asian markets, the largest demand area, while avoiding geopolitical risks such as the Strait of Hormuz. In particular, Malaysian natural gas holds the second largest position after Australia as a source of LNG importers to Japan, and from the perspective of Japan’s energy security, this expansion of these interests holds extremely significant importance. The company aims to maximize its existing infrastructure to quickly monetize the acquired interests.

INPEX Portfolio Expansion in Malaysia

In recent years, INPEX has rapidly accelerated its exploration and development activities in Malaysia. The company has continuously participated in public tender rounds conducted by Malaysia’s state-owned oil company Petronas, winning successive bids for areas such as 4E, SK418, and SK510 in the northeastern part of Sarawak. In addition, in 2024, it acquired the SB306A and SB306B exploration areas off East Sabah, and in 2025, acquired a 42.5% interest in the 2A mining area northwest off Sarawak through a company acquisition. In particular, the ‘Keltan Structure’ within the 2A block is attracting attention as one of Malaysia’s largest undrilled structures, with an estimated recoverable resource volume exceeding 9 trillion cubic feet. INPEX plans large-scale drilling campaigns in these multiple mining areas between 2026 and 2027, and the acquired interests in the Marjoram gas field will serve as valuable existing assets supporting these exploration projects until they transition into the production phase. The following photo is an image of the company’s marine development efforts around Malaysia.

Corporate Strategy “Vision 2035” and Accelerating Growth Investment

850 billion yen growth investment plan for fiscal year 2026

INPEX plans to invest 850 billion yen in growth for fiscal year 2026, the largest ever. This is a ‘Heaven and Earth Effort’ investment plan that doubles the approximately 400 billion yen investment in fiscal 2025. Behind this is a new recognition called “energy addition,” which refers to the increasing global energy demand. To meet the increasing electricity demand driven by the spread of AI and data centers, strengthening the supply capacity of natural gas as well as renewable energy has become essential. In its medium-term management plan from 2025 to 2027, the company has set a cumulative investment of 1.9 trillion yen, and the progress rate is steadily progressing. The funds needed to acquire equity in Malaysia will also be sourced from this large-scale investment framework. Finance Director Yamada stated that even if free cash flow temporarily turns negative, this decision is made to secure appropriate funding and achieve significant future results.

Building a revenue base until the Abadi project goes live

INPEX’s next largest growth engine is Indonesia’s “Abadi LNG Project,” aiming to start production in the early 2030s. However, it will still take time for Abadi to contribute to substantial revenue, and how to fill the “valley of revenue” in between remains an urgent challenge for the company. Therefore, the company is actively pursuing acquisitions of ready-to-produce assets and projects under development with immediate effects, and the acquisition of a gas field off the coast of Malaysia is an important part of its bridge strategy. In its “Vision 2035,” the company has set a “60-60” target to expand its business scale by 60 percent and reduce its GHG emission intensity by 60 percent by 2035. Piling up clean natural gas development projects like Malaysia’s offers a practical solution to simultaneously achieve the dual goals of revenue expansion and decarbonization.

Challenges in the Business Environment and Medium- to Long-Term Outlook

Confusion and risks surrounding gas supply authority in Sarawak State

One thing to watch closely for business expansion in Malaysia is the political developments surrounding Sarawak’s gas supply authority. Currently, the “Petronas-Petros issue” continues over the transfer of management authority over the gas supply chain between the state-owned oil company Petronas and Sarawak’s Petros. The Sarawak state government sought to return profits from its own resources and appointed Petros as the sole gas supply manager (gas aggregator). Although a “joint declaration” was signed between the federal and state governments in May 2025, no final agreement on specific operational policies or legal precedence has been reached, and negotiations remain deadlocked. At present, it has been confirmed that there will be no direct impact on LNG exports, including those destined for Japan, but there are concerns about increased complexity in on-site operational processes and the impact on investor sentiment. Overseas operators like INPEX need to carefully assess the risks of being caught between these parties while maintaining stable business operations. The diagram below illustrates the importance of energy infrastructure within Malaysia.

Future Developments and Impact on Shareholder Returns

INPEX plans to set its annual dividend of 108 yen per share for fiscal 2026, with a dividend increase of 8 yen from fiscal 2025. Despite a conservative profit outlook, the decision to increase dividends reflects the growth potential of new asset acquisitions like the Malaysia deal and management’s confidence in its solid financial foundation. Although the stock price has improved to near a PBR of 1, President Ueda analyzes that it remains at a relatively low level compared to its European and American peers. Going forward, the smooth development of the newly acquired gas fields and the success of large-scale exploration operations in Malaysia will be key to further deepening market trust. As natural gas is being re-evaluated as a “realistic transition fuel,” INPEX is determined to fulfill its supply responsibilities to Asia, starting from Malaysia, while aiming for sustainable enhancement of corporate value.

[#INPEX #天然ガス #マレーシア #トタルエナジーズ #エネルギー安全保障 #Vision2035 #経済ニュース #株主還元]