Oman

In January 2006, MedcoEnergi won a tender for a ten year duration Service E&P Agreement (the first of its kind in Oman) whereby Petroleum Development Oman, PDO, outsourced an onshore field area, Karim Fields, for a third party contract operator to operate on its behalf with the objective of arresting decline, increasing production and exploiting the potential of the fields.

The Company’s partners in the Contract to operate the fields are Oman Oil Corporation (OOC) – an oil and gas exploration and production company owned by the Government of Oman, Kuwait Energy (Kuwait Energy) - a Kuwaiti private investment company, and two Omani local private companies. Their partnership is established through a Joint Venture Agreement (JVA), with the following shareholdings:

> MedcoEnergi : 51%
> OOC : 25%
> Kuwait Energy : 15%
> Omani Partners : 09%

The term of the Service Agreement is 10 years (extendable) and has been effective since April 1, 2006. Oil production started in 1987, giving MedcoEnergi the opportunity to apply its skill and experience in field re-habilitation. MedcoEnergi took full field responsibility over 115 wells, producing 11,750 BOPD in August 2006. MedcoEnergi earns a fee from production, and is cost reimbursed. The benefit to MedcoEnergi is that it provides an opportunity for existing Indonesian employees to get international experience and it creates a pool of experienced talent for use in other international areas. The contract being fully cost recoverable does not require heavy working capital commitment and is self-funding.

As at year-end 2010, MedcoEnergi had drilled 105 wells.

Block 56

Type of Contract : PSC
Areas (Km2) : 5,808
Contract Expiry : 2039
Participacing Interest : Medco Arabia Ltd. - 75%
Intaj LLC - 25%
Status : Exploration