Indonesia Energy Corporation (IEC), a New York-listed company specializing in oil and gas exploration and production, signed a memorandum of understanding on August 18, 2025, with Aguila Energia e Participações Ltda. (AEP), an entity affiliated with Brazilian investment firm Aguila Capital. This agreement represents a strategic milestone for IEC, which plans to expand its operations beyond Indonesia into the Brazilian market.
The memorandum of understanding establishes a framework for collaboration between IEC and AEP to evaluate opportunities for acquisition or participation in energy projects located in Brazil. This cooperation combines IEC’s expertise in international oil and financial markets with AEP’s capabilities in local regulation, asset analysis, and energy project negotiation.
Strategic positioning in a shifting market
Brazil is a prime target for independent oil and gas companies due to its “Oferta Permanente” bid model, which allows acquisitions throughout the year. This flexibility attracts operators with available capital seeking short acquisition cycles and rapid production deployment.
Moreover, the presence of junior operators in the process of divesting low-cost assets creates a favorable environment for new entrants. Fields in production or nearing production are considered viable targets for rapid cash flow optimization.
Identified regulatory and tax advantages
Brazil’s concession regime allows for more flexible operational management, with government royalty rates ranging between 5 and 10%, and potential reductions for marginal fields. This contractual framework is particularly appealing to companies seeking improved margins and better returns on invested capital.
IEC sees this expansion as a diversification lever, complementing its activities in Indonesia. The company recently confirmed a drilling program for two consecutive wells on the Kruh block, which covers an area of 63,000 acres. These operations are supported by a seismic campaign conducted between 2024 and 2025.
Parallel expansion in the domestic market
In May 2025, IEC announced a 60% increase in its gross proven reserves on the Kruh block, following investments in three-dimensional seismic analysis. These results reinforce the group’s intention to continue its operations in Indonesia while exploring external opportunities.
The memorandum of understanding signed with AEP remains non-binding. It constitutes a declaration of intent to cooperate on selected projects on a case-by-case basis. AEP could also play a supporting role in the Indonesian market by identifying complementary assets for IEC.
