Senoro Gas Development, Central Sulawesi, Indonesia
Senoro Gas Development, one of MedcoEnergi's major developments, was once considered stranded gas due to its remote location and unavailability of infrastructure for the gas captives. We successfully develop and monetize the abundant gas resources into high quality markets that will take gas up to 310 mmscf per day.
Delivering Projects Development
Donggi Senoro LNG, Central Sulawesi, Indonesia
The Donggi Senoro LNG will be the fourth LNG plant in operation in Indonesia and the first LNG project built by national companies (MedcoEnergi, Pertamina) and partner Mitsubishi. The plant has a total capacity of 2 million tons of LNG per annum with gas supply from the Senoro-Toili gas field, in which MedcoEnergi also participate.
Our Operational Excellence
Karim Small Fields, Oman
MedcoEnergi has successfully provided the technical expertise to Petroleum Development Oman, a joint venture company between the Government of Oman and Shell, such that the production in Karim Fields reached over 22,000 bopdin 2012. This is more than double the rate of 9,000 bopd when Medco was initially assigned in 2006. This is testament to MedcoEnergi's core competence in harnessing the optimum production rate from mature fields, in Indonesia and overseas.
Clean Energy for a Cleaner World
Sarulla Geothermal, North Sumatera, Indonesia
The construction of Sarulla Geothermal Power Plant has started in 2014, and will produce geothermal power for 3 x 110 MW electricity. As the world's largest single-contract geothermal power project upon completion, the plant is envisioned to provide clean and sustainable electricity in Indonesia and expected to reduce carbon dioxide emission up to 1.3 million tonnes a year.
Block A, Aceh, Indonesia
In January 2015, MedcoEnergi inked a Gas Sales Agreement of over US$ 2 billion in value, monetizing 200 BCF reserves from the Block A Production Sharing Contract in Aceh Province, Indonesia. The customer is the state owned company Pertamina, with an agreed gas price of US$ 9.45 per MMBTU. This contract demonstrates the Company’s support to the development of the Indonesian domestic gas market, at the same time creating value for the company and establishing a vital economic presence in the province of Aceh.
People and Planet Positive Commitment
A Better Life for the Surrounding Communities
In areas where we operate, MedcoEnergi provides community empowerment programs which teach farmers the cultivation of SRI (System of Rice Intensification) organic rice which is environmentally-friendly, healthy, economic and gives higher and more frequent harvest yields.
Market Cap (Trilion IDR)
Ensuring MedcoEnergi is a safe, fair and honest place to work.
MedcoEnergi has successfully explored and discovered additional oil and gas from the Hijau-2 well in South Sumatera Block, Indonesia and from the O2 well i ...
AGMS MEDCOENERGI: PERFORMED IN 2014 DESPITE INDUSTRY CHALLENGES
PT Medco Energi Internasional Tbk ("MedcoEnergi" or the "Company") today convened the Annual General Meeting of Shareholders ("AGMS") in which the Company approved and ratified the 2014 Annual Report and 2014 Audited Consolidated Financial Statements, as well as the new composition of the Board of Commissioners and the Board of Directors. In addition to approving the Directors' report on the financial statements ending on December 31 2014, the shareholders also approved the dividend payout of US$0.00121 per share. Dividends will be paid on May 22, 2015 in the amount of US$4.05 million.
Through the continuous execution of cost-efficiency efforts started in 2013, the Company managed to maintain the stability of the operational and financial performance despite the natural oil production decline and the oil price fall in late 2014. In 2014, the Company managed to increase 2P oil and gas reserves by 40 MMBOE, hence, increasing the reserve Life Index from 14 years to 17 years. The Company also successfully arrested the decline of oil production from its mature fields in Indonesia to around 7%, much less compared to the natural decline of 20% per year. The Company recorded oil and gas production of 56,000 barrels of oil equivalent per day (BOEPD), down from 62,000 BOEPD in 2013. The realized average of oil price in 2014 was US$97.83 per barrel, lower than the US$108.26 per barrel in 2013. During 2014, the Company booked sales and operating revenues of US$750 million, of which 93% or US$701 million came from the oil and gas exploration and production business unit. As the result of renegotiation of several gas sales contracts in Indonesia, the Company achieved an increase of gas price to US$5.60 per million british thermal unit (MMBTU), compared to US$5.13/ MMBTU in 2013. This achievement boosted the Company's financial performance in 2014 by an additional revenue of US$40 million, compared to the Company's revenue from gas sales in 2013.
In line with the continuous efforts for efficiency, the Company managed to reduce selling, general, and administration costs in 2014 to US$110 million, down 5.8% from the amount recorded in 2013 of US$117 million. During the fiscal year of 2014, MedcoEnergi posted a net profit attributable to the parent entity of the Company ("Net Income") of US$10.1 million. The Company achieved significant progress in the development of major projects and continues to do so in the first quarter of 2015. The Senoro gas develoment project in Sulawesi has now reached more than 98% completion, including drilling of 13 wells and commencing the pre-commissioning of the CPP (Central Processing Plant) facility, enabling gas delivery tests. The gas delivery to the LNG plant owned by PT DSLNG, (Donggi Senoro LNG) is planned to start in the second quarter of 2015 for a gas supply contract period of 2027. In another gas project, the Block A located in Aceh, Gas Sales Agreement (GSA) with PT. Pertamina was signed in early 2015 with a gas price of US$9.45/MMBTU for 13 years of supply. The Final Investment Decision (FID) will be made in mid-2015 with a target gas delivery in late 2017, for a gas supply of 58 billion british thermal unit (BBTU) per day and a total gas volume of 198 TBTU. In the Rimau Block in South Sumatra, the Enhanced Oil Recovery (EOR) pilot project was completed and successfully proved the feasibility of this technology on a small scale by achieving the incremental oil production as designed.
In 2014, the Company expanded its portfolio of international oil and gas assets through the acquisition of one exploration license in Papua New Guinea and eight concession blocks in Tunisia, as well as winning the tender of one exploration block in Oman. The blocks in Tunisia have increased the Company’s production by 2,500 BOEPD and 2P reserves by 12 MMBOE. Further development of these Tunisia assets will increase production to 16,000 BOEPD by 2019.
President Director and CEO of MedcoEnergi, Lukman Mahfoedz stated "We closed 2014 successfully by maintaining our operating and financial performance. The Company's two most important projects, Senoro Gas and DSLNG, are both ready to operate in mid-2015 and will contribute significantly to MedcoEnergi's revenues for decades ahead and deliver value to the shareholders and the government of Indonesia. MedcoEnergi’s contribution to the government of Indonesia in 2014 and 2013 amounted to US$680 million and US$868 million respectively, derived from oil and gas production sharing as well as taxes. In the last 14 years, MedcoEnergi's total contribution to the state is US$11.8 billion." Lukman also added, "To anticipate weakening oil prices, the Company will continue to implement efficiency efforts, tightly monitor costs and proceed with prudence particularly in the challenging times today and in the future."
Maintaining Net Profit Margin Through Effective Efficiency Strategy
Jakarta, Monday, 30 March 2015 – PT Medco Energi Internasional Tbk succeeded in implementing a cost-efficiency strategy as mitigation towards the adverse impact of declining oil price in 2014. The Company is able to maintain a positive net income and has announced this achievement in its financial report on 30 March 2015.
In 2014, the Company has succeeded in arresting the natural decline rate of its matured oil fields in Indonesia by 7%. This is an achievement in and of itself when compared to the average natural decline rate of oil and gas production globally which is in the range of 20%-25%. The decrease in oil production in comparison to 2013 was also attributable to the relinquishment of Sembakung Block to PT Pertamina in December 2013. The Company booked a total oil and gas production of 56,000 barrel oil equivalent per day (BOEPD) in 2014, which is lower than the 2013 production of 62,000 BOEPD. The Company recorded an average realized oil price of US$97.83/barrel, a 9.6% decrease from the realized crude oil price in 2013.
Despite the declining oil production and the lower realized crude oil price, the Company was able to increase the revenues from gas sales through successful renegotiation of several domestic gas sales contracts. The average of gas sales price increased to US$5.60/MMBTU in 2014, a 9.2% increase compared to the gas price in 2013. This achievement has significantly supported the Company’s financial performance in 2014 by contributing an additional revenue of US$40 million, compared to the Company’s revenue from gas sales in 2013.
Given the two factors above (oil and gas production and oil price), the Company booked a total net oil and gas sales of US$701 million in 2014, a 15.2% lower than the previous year which was US$827 million. The exploration and production of oil and gas business unit remains as a major contributor by providing 93.4% of the total sales and operating revenues of US$750 million. In 2014, the Company also posted a gross profit and operating profit for US$271 million and US$161 million respectively. The earnings before interest, taxes, depreciation and amortization (EBITDA) in 2014 is calculated at US$259 million, lower than 2013 figure of US$351 million.
A business process efficiency strategy, which has been implemented since 2013 to date, has fended the Company’s financial performance, mitigating the impact of the declining oil price and the natural decline rate of the Company’s oil production. In particular, MedcoEnergi succeeded in reducing its cost of sales as well as general and administrative expenses in 2014 to US$110 million, a 5.81% decrease compared to US$117 million in 2013. The Company’s head office cost was also cut by 25% compared to the previous year. The effective implementation of efficiency strategy as well as the success in reducing the Company’s borrowing costs through early repayment of several high-interest bearing loans has also contributed to a positive financial performance, maintaining a profit attributable to owner of the parent company amounting to US$10.1 million in 2014, a decline of US$2.5 million compared to US$12.6 million in 2013. The company also successfully reduced the cost of borrowing from US$77 million in 2013 to US$71 million in 2014.
Furthermore, MedcoEnergi’s achievements in 2014 include the addition of the international oil and gas asset portfolio through the acquisition of four exploration blocks in Papua New Guinea, eight oil and gas blocks in Tunisia, and Block 56 in Oman. The eight new blocks in Tunisia have increased the Company’s oil and gas production rate and 2P oil and gas reserves of 2,800 BOEPD and 11 MMBOE respectively. MedcoEnergi plans to increase its oil and gas production of Tunisian assets up to 16,000 BOEPD in 2019.
In the development of the Company’s Major Project, MedcoEnergi will complete the Senoro Gas Project and Donggi Senoro LNG (DSLNG) plant by the middle of this year. The gas from Senoro Gas to DSLNG is slated by June 2015, and the first LNG cargo is expected in October 2015. Both projects will contribute significantly to the Company's earnings starting in 2015. The next Major Project is Block A gas development in Aceh. After the signing the Gas Sales and Purchase Agreement (GSPA) in January 2015 with PT Pertamina at the agreed gas price of US$9.45/MMBTU, the Company, along with its partners, will reach its FID (Final Investment Decision) in the second quarter of this year. The first gas delivery of 58 BBTU (Billion British Thermal Unit) per day is slated by the end of 2017.
In 2014, the Company, through PT Medco Power Indonesia, successfully completed the Sarulla Geothermal project financing of US$1.2 billion from JBIC, ADB and a consortium of commercial banks. Currently the construction work at the site is underway and four production wells in Sarulla’s two geothermal fields are being drilled and tested. The completion of Sarulla 3x 110 MW Geothermal Project, which is located at North Sumatra province is scheduled for its Unit-1 by 2016, which will be followed by Unit-2 and 3 in 2017 and 2018 respectively.
Lukman Mahfoedz, President Director and CEO of MedcoEnergi said, "The Company continues to be on the right track throughout 2014, continuing to pursue long-term growth objectives as well as the completion of several major projects according to plan." Lukman added, "The Company will continue to implement efficiency strategy on its overall business process as well as operational costs including reviewing exploration activities and projects, particularly for those that have not reached FID. MedcoEnergi will continue to prioritise investments that will provide additional oil and gas production to support the Company’s sustainable growth in the future.”
Aceh, 19 March 2015 - Oil and gas company often has to deal with the theft of crude oil and gas in its area of operations. PT Medco Energi Internasional Tbk through its subsidiary PT Medco E&P Malaka (“Medco E&P”) (together as “MedcoEnergi” or the “Company”), the operator of Block A PSC, located in East Aceh, where relics of some old wells from the previous operator are in existence Old wells have been shut down and are not in operations. To prevent theft and illegal use, Medco E&P Malaka continuously reaches out to the local community to provide information and make appeals regarding the dangers and risks of conducting oil and gas wells illegally.
Despite the above effort, theft still occurs, as happened on 8 March 2015 in the JR-57 well. The JR-57 well has been closed down by the previous operator since 2000. The incident was resolved quickly by the Company by performing isolation, outages and repairs. The JR-57 well has been made safe and re-closed after the damaged main valve and safety valve was successfully replaced. A concrete fence will also be erected to further ensure the security of the well. The JR-57 well incident handling involved support from the East Aceh District Government, the Fire Department, and local village officials, as well as the Contractor (PSC) which also operates in the surrounding area. The fire did not cause casualties nor pollution of the environment.
"We would like to thank all those who have provided support and assistance to overcome this incident. Utilization of wells illegally, including illegal oil theft, is a very dangerous and high risk activity. In addition to endangering the perpetrators, such actions can harm the public and the environment because of the environmental impact. We call for this illegal activity to be stopped, so that the safety and security of the public, workers and the environment can be maintained, "said Herman Hussein, General Manager of PT Medco E & P Malaka.
Block A, Gas Project
PT Medco E & P Malaka, the operation of Block A PSC, is in development of gas reserves that will be used to meet the needs of domestic gas in the provinces of Aceh and North Sumatra, primarily to meet the needs of local industry and fertilizer plant. The signing of the Gas Sales and Purchase Agreement (GSPA) with PT Pertamina (Persero) was conducted in January 2015. The target of first gas supply will begin in 2017 and continue for a period of 13 years, with a gas volume of 198 TBTU and daily gas supply for 63 BBTU per day. "We expect the support of all parties so that the Project Block A can immediately run and the investment climate can be maintained conducive so that the project can provide important contribution to the Government of Aceh in general and in particular to the Government of East Aceh," said Teguh Imanto, the Senior Manager of Relations.
Medco E&P Indonesia Localizes JR-57 Well Fire, Block A – Aceh
Aceh, March 8, 2015 – The safety of the people, environment and employees are a top priority for PT Medco Energi Internasional Tbk and its subsidiary PT Medco E&P Indonesia ("Medco E&P" or the "Company"). Following up on information from the field, the Company confirmed that on March 8, 2015 at 04:00 am there was a fire at JR-57 gas well, Block A, located in Blang Nisam village, Indra Makmue District, East Aceh. This well is a mature well that had been closed by the operator prior to Medco E&P operatorship and has not produced since 2000. The well location is also a fair distance away from community settlement.
Allegedly, the fire was caused by the actions of irresponsible persons who intend to illegally activate this well and produce from it. The company has coordinated with the police and East Aceh Local Government to enforce safety and security procedures.
Until the issuance of this press release, there were no reports of casualties or environmental pollution. "Our priority now is the safety and security of the public, workers and the environment. The Company has been cooperating with related parties to undertake the necessary steps to extinguish this fire as soon as possible," said Teguh Imanto, Senior Manager of Relations, Medco E&P.(***)
Jakarta, 27 January 2015 - PT Medco Energi Internasional Tbk through its subsidiary PT Medco E&P Malaka (“Medco E&P”) (together as “MedcoEnergi” or the “Company”) opened the year of 2015 with the important signing of Gas Sales and Purchase Agreement (GSPA) Block A, Aceh and Amendment GSPA South Sumatera Block. The total gas volume is over 200 Trillion British Thermal Unit (TBTU), equivalent to the total gas sales value of over US$ 2 billion. The signing was held today at the 2015 Indogas Conference and Exhibition. Both GSPAs demonstrate the Company’s commitment to continuously develop the Indonesian gas market by supplying gas to Aceh, North Sumatera and South Sumatera areas.
The GSPA with Pertamina for Block A will be used to supply gas demand in Aceh and North Sumatera provinces, especially for fertilizer and local industry. The final investment decision (FID) is targeted by mid 2015 and the gas supply is slated to commence by 2017 for the contract period of 13 years, with a total gas volume of 198 TBTU and a daily gas supply of 58 BBTU per day. The agreed gas price is US$ 9.45 perMillion Metric British Thermal Unit (MMBTU) at the tie-in pointof Arun Belawan gas pipeline. In addition to Pertamina, the Company will sign a GSPA with PT PLN (a state-owned electricity company) for a volume 5 to15 BBTU per day by mid 2015.
The participating interest in this Block A PSC is MedcoEnergi 41.67% (as the operator), KrisEnergy 41.66%, dan Japex 16.67%. The Block A gas development is one of the Company’s major projects. The GSPA is expected to bring revenues of US$ 2 billion to the Government of Indonesia and PSC Contractors with the distribution to the Government of US$ 492 million, to the PSC contractors of US$ 209 million and also the cost recovery of US$ 1.3 billion.
The Company also signed the GSPA amendment with Perusahaan Daerah Mura Energi to fulfill the gas needs for electricity in Musi Rawas Regency, South Sumatera. Medco E&P will supply gas from South Sumatera Block with a total contract volume of 8,750 Billion British Thermal Unit (BBTU) for 11 years with a daily gas supply of 2.5 BBTU per day. MedcoEnergi has successfully increased the gas price from US$ 3.00 per MMBTU to US$ 6.50 per MMBTU with an escalation factor of 2.5% per year. This GSPA is expected to bring revenues of US$ 66 million to the Government and PSC contractors.
Lukman Mahfoedz, Presiden Director & CEO MedcoEnergi, cited, “With the above signed gas sales contract, MedcoEnergi’s revenues will be less dependent to the global oil price fluctuation since the gas price is not linked to oil price. As Senoro Gas and Block A Gas projects complete in 2015 and 2017 respectively, the ratio of the Company’s revenues from oil and gas sales will be around 50:50.” Lukman also added, “The commencement of Block A project will provide a significant contribution to local government and also expanding the employment opportunity in the surrounding community.”
For Four Consecutive Years, MedcoEnergi Achieves Proper Gold
2014 is a year full of achievement and pride for environmental management in Medco E&P Indonesia operation areas. Today, PT Medco Energi Internasional Tbk, through its subsidiary PT Medco E&P Indonesia has received the PROPER Gold (Company Performance Rating Program), the highest achievement given by the Ministry of Environment and Forestry for environmental and social management, especially in Rimau Block operation area. This is the fourth consecutive year Medco E&P has received the PROPER Gold, the first and only oil and gas company in Indonesia thathas received the award and the only one among various industries that implements a responsible and sustainable environmental management beyond compliance.
MedcoEnergi proudly announces that three other operating blocks have also won the PROPER Green, one rank below the Gold rank in this year, i.e. South Sumatra Block for the fifth consecutive year, Lematang Block for the second consecutive year and Kampar Block for the fifth consecutive year.
The PROPER Award was presented by the Vice President of the Republic of Indonesia, Jusuf Kalla, at the Environment and Forestry Awards Night in Jakarta, 2 December 2014. This rating is awarded through a series of assessment and several field trips. All stages of the assessment were carried out by the Ministry of Environment and Forestry team, Regional Environmental Agency as well as university representatives.
"This achievement is a true recognition of the Company’s commitment , which engages in business activities to the highest ethical and environmental standards at all times. The programs we run are a concrete manifestation of our considerable concern and efforts towards environmental sustainability and empowerment of local communities. Among others, greening the operation area, domestic waste treatment management, organic paddy fields, organic plant, and the empowerment of women through medicinal plant gardens," said Frila B. Yaman, Director & COO MedcoEnergi/President Director of Medco E&P.
Lukman Mahfoedz, President Director & CEO MedcoEnergi said, "This achievement confirms that MedcoEnergi, as a national private oil and gas company (PMSN), is leading the oil and gas industry, particularly in environment and social areas. . With this success, and supported by our proved long track expertise and experience in managing oil and gas fields, the Company expects that the Government would provide more opportunity to MedcoEnergi to operate the upcoming expiring exploration and production blocks in Indonesia ".
MedcoEnergi Signs A New Exploration & Production Sharing Contract in Oman
PT Medco Energi Internasional Tbk, through its wholly-owned subsidiary, Medco Arabia Ltd. is pleased to announce a majority participation in a new Exploration & Production Sharing Agreement in Oman, Block Oman 56 (“Oman 56” or the “Contract”). The Contract was signed by the Minister of Oil and Gas of Oman, Dr. Mohammed bin Hamad Al Rumhy. The Contract is between the Government of Oman and the Company, together with a local partner Intaj LLC (“Intaj”). In this consortium, Medco has the majority working interest and the operatorship of Oman 56.
Oman 56 is located in the prolific Oman Salt Basin. With an area of 5,808 square kilometers and three identified technical discoveries, it has an estimated oil in place of 370 million barrels with six other potential prospects. MedcoEnergi is committed to drill three exploration wells in the first exploration period.
Oman 56 will add to MedcoEnergi’s international portfolio with assets in Oman, Libya, Yemen, Tunisia, USA and Papua New Guinea. MedcoEnergi has been in Oman since 2006 as operator of the Karim Small Fields (KSF) Service Contract. Oman 56 is located adjacent to KSF with similarities in geology and advantage in synergy of operations.
Lukman Mahfoedz, President Director & CEO of MedcoEnergi said, “Oman 56 is one of the biggest exploration acreages in Oman and has a large hydrocarbon potential. It further asserts our presence in the Middle East & North Africa region, specifically in Oman. I am confident that in this block we can repeat the success story of our KSF operations, given our outstanding operational performance and very good safety track record so far.” Lukman added that “This acquisition is in line with the Company’s strategy to strengthen the E&P portfolio of assets through high-graded exploration activities, in support of our business growth in the near future.”
MedcoEnergi’s 3Q 2014 Operational and Financial Results
PT Medco Energi Internasional Tbk has announced its consolidated financial statements for the period ending 30 September 2014 (“3Q 2014”).
In 3Q 2014, the Company has succeeded again in exploration activity by finding new oil and gas reserves at Hijau-2 well, South Sumatera Block, Indonesia as well as at P2 and O2 wells in Area 47, Libya. MedcoEnergi has also successfully completed the acquisition of 100% shares of Storm Ventures International (Barbados) Ltd. with Chinook Energy, Inc. for the ownership and participating rights in eight E&P working areas in Tunisia. Furthermore, the Company continuously demonstrates its commitment to develop the domestic gas market by signing two Gas Sales and Purchase Agreements (GSPA) with PT PLN Persero and PT MEPPOGEN. These gas supplies will be used for power generation to meet electricity demands in the South Sumatera and North Kalimantan regions respectively.
As of this quarter, MedcoEnergi has booked total revenue of US$ 552 million. The oil and gas exploration & production sector (“E&P”) contributed 94% to this amount, or equivalent to US$ 518 million, with a total volume of oil and gas of 53,300 barrels of oil equivalent (BOE) per day for the period of 1 January – 30 September 2014. In accordance with the world oil price trend, the average oil price for the period was US$ 106.3 per barrel which was lower than the price in the same period of last year of US$ 108.5 per barrel. In contrast, the average gas price rose by 11% to US$ 5.60 per MMBTU from US$ 5.04 per MMBTU in 2013 as a result of the Company’s success in renegotiating gas sales contracts.
The Company recorded gross profit of US$ 199 million and operating income of US$ 138 million in 3Q 2014. The Company continues with its cost efficiency initiative and has succeeded in lowering operational costs by 10% from US$ 68 million for the third quarter of 2013 to US$ 61 million for the same quarter in 2014, and recorded an EBITDA (Earnings before Income, Taxes, Depreciation and Amortization) of US$ 215 million. In 3Q 2014, the Company booked profits attributable to the parent (Net Profit) from operations of US$ 9.5 million, a relatively stable performance compared to the same period of last year. These financial results have not reflected the positive contribution of production and financial performance from the Company’s assets in Tunisia, which will be recorded starting in October 2014.
President Director and CEO of MedcoEnergi, Lukman Mahfoedz commented that “The completion of Senoro Project has reached 87% and will reach its Mechanical Completion in early 2015. Meanwhile, the construction of Donggi Senoro LNG plant was completed and is currently under a commissioning stage. The completion of these two projects reflects the Company’s ability to realize its major projects which will be subsequently followed by other major projects such as Block A, Simenggaris, Libya and Tunisia in 2017 – 2019. On 17 September 2014, the Company has received the 2nd Commerciality Declaration approval upon the successful exploration and appraisal programs in Area 47, Libya. This Commerciality Declaration will add 74 MMBOE (gross) to the Company’s 2P Reserves (Proven & Probable), in addition to 208 MMBOE (gross) from the 1st Commerciality Declaration approval which was obtained in December 2011. Lukman closed by stating that “I am confident MedcoEnergi will grow along with the completion of Senoro Gas Projects in 2015, followed by other Major Projects started in 2017 onwards.”
MedcoEnergi Continues to Supply Domestic Gas Demand
In the past few years, the gas supply in Indonesia has shown a decline due to natural decline of gas production from the fields, while gas demand is steadily increasing to support the economic growth and infrastructure development including power generation. To affirm its commitment to continuously develop the Indonesian gas market, PT Medco Energi International Tbk, through its wholly-owned subsidiary PT Medco E&P Indonesia has signed two Gas Sales and Purchase Agreements (GSPA) with PT PLN Persero and PT MEPPOGEN on Friday, 17 October 2014 in Jakarta. The two GSPAs will supply gas for power generation in the North Kalimantan and South Sumatera areas respectively.
MedcoEnergi supplies gas to PT MEPPOGEN’s Gunung Megang Gas-Fired Power Plant in the Muara Enim Regency. Total gas volume of 6,6 Trillion British Thermal Units (TBTU) will be supplied from the South Sumatra PSC block operated by the Company. The supply period will be 21 months or until the said total gas amount is utilized. The agreed gas price is US$ 7.32 per Million Metric British Thermal Unit (MMBTU) for the year 2014, escalating 3% per year. The GSPA is expected to bring revenues, approximately at US$ 43 million to the Government of Indonesia and the PSC Contractor.
The Company, through its Joint Operating Body Pertamina Medco E&P Simenggaris (“JOB-PMEPS), has also signed a GSPA with PT PLN (Persero) to supply 805 BBTU of gas. The contract period is five years with the agreed gas price of US$ 5.52 per MMBTU. The gas will be supplied from South Sembakung gas field in Simenggaris Block to generate electricity in the Tana Tidung Regency, North Kalimantan. The GSPA is expected to bring revenues of US$ 3 million to the Government of Indonesia and PSC Contractors.
Lukman Mahfoedz, President Director & CEO of MedcoEnergi, cited “MedcoEnergi continues to actively explore to discover more oil and gas reserves as well as to supply more gas to the domestic market. In the last two years, the Company has succeeded in finding new gas reserves from its exploration operations, such as Matang (Block A PSC, Aceh), Bajul Besar (Simenggaris PSC, North Kalimantan) and recently Hijau (South Sumatra PSC, South Sumatera).
MedcoEnergi Again Discovers Oil and Gas in Indonesia and Overseas
MedcoEnergi , has successfully explored and discovered additional oil and gas from the Hijau-2 well in South Sumatera Block, Indonesia and from the O2 well in Area 47, Libya.
Hijau-2 Well, South Sumatera PSC, Indonesia
The Hijau-2 delineation well, located in the South Sumatra PSC, was drilled to a vertical depth of 5,695 ft. (1,736 meters), proving a 35-meter gas column in the Baturaja limestone formation. A Drill Stem Test confirmed a gas flowrate of 5.05 million standard cubic feet per day (MMSCFD) through a 24/64 inch choke.
MedcoEnergi describes the well as a “prospect opener” in the still prolific South Sumatra basin, where the Company has substantial acreage. This discovery is assessed as commercially viable, South Sumatera being an area with existing infrastructure and high gas demand. It will increase the Company’s gas production for the domestic market.
O2 Well, Area 47, Libya
O2 well was spudded on 23 May 2014 and drilled to a total depth of 10,780 feet. Initial tests demonstrated the well flowing 3,300 barrels of oil per day and 140,000 standard cubic feet per day of gas through a 48/64 inch choke in the Top Lower Akakus formation. The O2 well location that lie outside reservoir closing contour proved the existence of stratigraphic element that may have connection to multiple structures in the area. The discovery of O2 well and P2 well in last July 2014 again proved the prolific hydrocarbon area of Ghadames Basin in Area 47, where large oil and gas reserves was discovered with a 90% exploration success rate (18 out 20 exploration wells discovered oil and gas).
Furthermore, on 17 September 2014 the Government of Libya declared the commerciality of B, C and J structures in Area 47. MedcoEnergi, with its partners National Oil Corporation (NOC) Libya and Libyan Investment Authority (LIA), will commence this development together with the A, D and F structures, previously declared commercial in 2011. Combined, the total estimated oil and gas recoverable reserves is 250 MMBOE.
Lukman Mahfoedz, President Director and CEO MedcoEnergi, stated, “These successes prove our Company’s strong capability in exploration with more and more discoveries of new oil and gas resources in Indonesia as well as overseas. This achievement will contribute to MedcoEnergi’s growth by adding oil and gas reserves and increasing the Company’s reserve life index.”