PT Medco Energi International Tbk announced that its subsidiary, Medco Oman LLC (collectively referred to as “Company”) has signed an Amendment of the Karim Small Fields Agreement (“KSF Amandment”) with Petroleum Development of Oman (“PDO”) on April 28, 2015. The signing was done by the Managing Director of the Company, Lukman Mahfoedz, and witnessed by the Minister of Oil and Gas of Oman, Dr. Mohamed bin Hamad Al Rumhy, Indonesian Ambassador to Oman, Sukanto, and President Commissioner of the Company, Hilmi Panigoro.
The KSF Amendment confirms the change of commercial and technical aspects of the KSF Operation Service Contract, which had previously been signed by the Company (together with partners) with PDO in 2006 for a ten-year contract period.
Some new items specified in the KSF Amendment include, among others, a 25-year additional contract for the Company (together with partners) to operate the Karim Small Field effective after the signing of the KSF Amendment, exploration program for the drilling of three wells in the first two years, profit-sharing scheme determined by cost of production where this scheme determined by cost of production where this scheme will provide a better economic value to the contractor, and the provision of incentives for the discovery of oil and gas based on the amount of resources or oil and gas reserves found.
As operator in the Karim Small Fields, the Company controls 51% stake. While, Kuwait Energy Company (KEC) and two local partners, and Oman oil Company Exploration & Production (OOCEP) have the rest. Since its operation in 2007, the Company has successfully double the Karim Small Fields oil production so it reached its peak production of over 22,000 barrels of oil per day (BOPD) in 2012, with total number of development wells that have been drilled to date reaching more than 250. Currently, the average volume of oil production is 17,000 BOPD.
Lukman Mahfoeds, President Director of MedcoEnergi said, “We are delighted with the new KSF contract, with a better commercial value as well as greater opportunities for exploration to find new hydrocarbon sources. The 25-year extension of the contract is a proof of success of MedcoEnergi in operating the KSF field by doubling oil production in the last 9 years. MedcoEnergi will continue to strengthen cooperation with the Government of Oman and PDO in the next 25 years to increase oil production through exploration activities in order to discover new oil and gas reserves and to increase oil production through exploration activities in order to discover new oil and gas reserves and to maintain safety in its operations. “Lukman closed his statement with,” Our operations team in Oman, which currently consisted of over 80% of Oman residents, has worked extensively in enhancing the operational value of MedcoEnergi in the international arena and has supported the Company’s business strategy in strengthening the portfolio of production assets. In the future, we will increase employment opportunities for local workers, not only in Oman but also in our other operation areas globally.
MedcoEnergi is a public-listed integrated energy company with a focus on exploration and production of oil and gas. MedcoEnergi has operations in Indonesia, including nine oil and blocks and has economic participation in an exploration field. MedcoEnergi’s overseas operations are in Libya, Oman, Papua New Guinea, Tunisia, Yemen and the Gulf of Mexico in the United States. In addition, MedcoEnergi also operates several gas and steam power plants to supply electricity to PLN (States Electricity Company) and has a coal mining business unit as well as gas distribution unit.
This documents contains financial condition, result of operations, projection, plans, strategies, policies and specific objectives of the Company, which can be classified as a forward-looking statement in the sense of the applicable legislation. Forward-looking statement basically involves risks and uncertainties that could cause actual results and developments which materially differ from the implied or stated statements. The Company does not guarantee that all the actions that have been taken to ensure the validity of this documents will bring certain results as expected. (E)
Business New - May 6, 2015