MedcoEnergi Eyes 50% Contribution from Foreign Oil, Gas Projects by 2017
Indonesia's PT Medco Energi Internasional (MedcoEnergi) expects overseas projects to contribute half of the company’s petroleum production and revenue by the end of 2017 amid a major expansion of its oil and gas business, a senior executive told local daily The Jakarta Post .
“At the moment our projects abroad make up about 40 percent of our revenue and around 30 percent of our output,” Medco Energi’s corporate secretary Imran Gozali said.
The Indonesian firm currently operates oil and gas projects in six countries, namely the US, Libya, Oman, Yemen, Papua New Guinea and Tunisia -- the company's latest addition as falling reserves prompted the company to look for new blocks abroad and boost production from its existing projects.
MedcoEnergi received approval to commence activities in eight oil and gas blocks in Tunisia last month following its $114.03 million acquisition of Storm Ventures International (Barbados) Ltd. from Storm Ventures International Inc. -- a subsidiary of Toronto-listed Chinook Energy Inc. The new blocks will add around 12.3 million barrels of oil equivalent (MMboe) to MedcoEnergi's reserves and produce 2,800 barrels of oil equivalent per day (boepd) and up to 16,000 boepd after development work are completed.
MedcoEnergi has allocated $4.1 billion in capital expenditure (capex) to develop both the firm’s domestic and overseas projects through 2017.
“The capex will be spent on our Senoro project (Central Sulawesi), Block A gas project (Aceh) and Simenggaris gas project (East Kalimantan) as well as our projects in Libya and Tunisia,” Imran said.
Domestically, MedcoEnergi's Block A gas facility project, costing $797 million, will be able to produce around 63 million standard cubic feet per day (MMscf/d) of gas to supply the Arun-Belawan pipeline when it commence operations at the end of 2016. The $2.8 billion liquefied natural gas (LNG) plant project at its Senoro oil and gas field, which can produce 310 MMscf/d of gas, is targeted to begin operations in 2015.
Turning to its overseas projects, MedcoEnergi is developing the Area 47 oil field in Libya to produce 50,000 boepd and 47 MMscf/d of gas at a cost of $250 million.
MedcoEnergi's oil and gas production is estimated to reach 100,000 boepd by 2019, up 60 percent from current levels, as ongoing projects commence production. The firm's total petroleum production fell 8.82 percent to 62,000 boepd last year, compared to 68,000 boepd in the previous year amid declining reserves, The Jakarta Post reported.
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