Indonesia Energy Diversifies into Brazil with Strategic MOU

Indonesia Energy Corporation (INDO) has signed a non-binding Memorandum of Understanding (MOU) with Aguila Energia e Participações Ltda. (AEP) to explore energy opportunities in Brazil. This marks INDO's first expansion beyond Indonesia and aims to merge INDO's oil and gas expertise with AEP's knowledge of the Brazilian market. The Brazilian market offers favorable terms, including 5-10% royalties on concessions, and INDO plans to drill two new wells in its Kruh Block in Indonesia during Q4 2025.

Indonesia Energy Corporation (INDO) has taken a significant step towards international expansion by signing a non-binding Memorandum of Understanding (MOU) with Aguila Energia e Participações Ltda. (AEP). This agreement marks INDO's first foray into the Brazilian energy market, aiming to leverage AEP's local expertise to explore new opportunities [1].

The MOU, signed on August 18, 2025, establishes a cooperative framework between INDO and AEP to identify, evaluate, and pursue potential opportunities in oil and gas or other energy-related assets and projects in Brazil. The collaboration combines INDO's extensive oil and gas and capital market experience with AEP's capabilities in local Brazilian transactions, regulatory engagement, and asset development [1].

The Brazilian market presents favorable terms, including royalties ranging from 5% to 10% under concession contracts, which could potentially enhance after-tax cash flows compared to production-sharing contracts. Additionally, the Oferta Permanente bid system allows year-round acquisition opportunities of relinquished and new exploration and production blocks, creating potential faster deal cycles [1].

INDO's President, Frank Ingriselli, commented on the strategic importance of this collaboration, stating, "This marks an exciting first step by INDO to evaluate world-class opportunities beyond Indonesia in Brazil, a market that has become one of the most attractive for upstream investment. Working with Blener Mayhew and his team will give us immediate local insight and access. In addition to opportunities in Brazil, AEP may also assist us in further commercializing our Indonesian assets and identifying new Indonesian domestic growth projects. Together with our planned drilling program at our Kruh Block, this initiative advances our growth strategy to scale production and diversify our portfolio in the final months of 2025 and beyond" [1].

This announcement comes just a few weeks after INDO announced its plans to drill two back-to-back wells on its 63,000-acre Kruh Block in Indonesia, commencing in the fourth quarter of 2025. The new drilling activities will be supported by the previously announced exploratory seismic work, which upgraded INDO's wellsite prospects and drilling locations with a view towards maximizing production. In May 2025, INDO reported a 60% increase in proved gross reserves at Kruh Block following investments and 3D seismic work [1].

The MOU is a non-binding statement of intent, and INDO and AEP will seek to enter into appropriate definitive agreements for projects on an opportunity-by-opportunity basis [1].

References:

[1] https://finance.yahoo.com/news/indonesia-energy-signs-memorandum-understanding-113000530.html