On May 4, 2007, PT Medco Energi Internasional Tbk ("Company" or "MedcoEnergi"), through its wholly owned subsidiary, Medco Bawean (Holdings) Pte. Ltd. ("Medco Bawean"), signed a Sales and Purchase Agreement ("SPA) with HCM Investment Services Ltd. ("HCM"), a subsidiary of Enterprise Trading Ltd. ("Enterprise"), to purchase 49.99% shares of Camar Bawean Petroleum Ltd. ("CBPL") owned by HCM, with the purchasing price of USD 22 million.
Prior to the execution of the SPA, CBPL was owned by Medco Bawean 50.11% and HCM 49.99%, respectively. By acquiring HCM shares, the Company, through Medco Bawean, presently holds 100% of CBPL shares.
BP Migas, Indonesia's upstream oil and gas regulator on February 28, 2007, approved the transfer of 30% Working Interests of Bawean PSC Block, which was owned by Indo Pacific Petroleum Ltd. ("IPR"), to Camar Resources Canada Inc. ("CRC"), which already held 5% Working Interests in the first place and is also the Operator of Bawean Block PSC. With such transfer, the composition of Working Interests holders at Bawean Block PSC, which is located in the eastern part of Java, became 35% owned by CRC and 65% owned by CBPL.
In December 2005, the Company expressed its interest in directly participating in Bawean PSC Block. Consequently, it was the valid reason for MedcoEnergi to provide CRC with the financial and technical supports during the Working Interests transfer from IPR to CRC as well as authorizing CRC to be the Company's nominee in acquiring the Bawean PSC Block.
"The Current production rate in Bawean PSC block is expected to be steady at 1,000 BOPD. In the near future, the Company anticipates CRC will be able to achieve oil production with average flow rate of 1,500 BOPD," said Andy Karamoy, Corporate Secretary of MedcoEnergi. "Based on our internal estimates, the Proved and Probable (2P) reserves in Bawean PSC Block as of January 1, 2007 was 14.72 MMBO."
The operating terms of the Bawean PSC Block will expire on 2011. Currently CRC is in the process of obtaining approval for the extension of Bawean Block PSC contract from BP Migas.
Because the Bawean Block PSC is located in the offshore, it has a high operation risk and also require high operating costs. Thus, the Company decides to share risk with partners who are willing to invest in offshore fields. Therefore, the Company might divest some of its Working Interests in the future when the opportunity is available.
MedcoEnergi is a publicly listed integrated energy company in Indonesia, with business involvement in oil and gas exploration and production, oil and gas drilling services, methanol production, LPG production and power generation. It has operations in Oman, Libya, and the Gulf of Mexico in the United States and in several areas in Indonesia.
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