Medco Energi Acquires Block E Offshore Cambodia
PT Medco Energi Internasional Tbk through it subsidiary, Medco International Petroleum Limited, and its partner JHL Petroleum Limited have received the Petroleum Agreement and Participation Deed which were signed with the Kingdom of Cambodia represented by the Cambodian National Petroleum Authority for the exploration of Block E offshore Cambodia.
Medco Energi and JHL hold interests of 90% and 10%, respectively and Medco Energi will act as the operator.
The first phase of the exploration agreement is for three years and with the permission of CNPA can be extended to the second and third phases for another two years, respectively.
Unlike the Production Sharing Agreement in Indonesia, there is Government Royalty under the Agreement with the Government of Cambodia, which allocate the initial 12.5% of production to the Government of Cambodia. The 90% of the remaining production will be taken by PT Medco Energi, and Medco shall have the right to take, from n, an amount of production equal in dollar value to its un-recovered petroleum costs from the entire contact area for the current and prior contract years (Cost Recovery Petroleum). The remaining production (referred to as Net Oil or Net Gs individually or "Net Petroleum" collectively) shall be allocated in accordance with the Petroleum Regulations of Cambodia. PT Medco shall pay corporate income tax of 30% to the Kingdom of Cambodia.
After the first commercial production, CNPA shall have the option to receive a 5% working interest. This will be free carry for CNPA.
Medco has paid social development project funds of US $4.5 million to the Kingdom of Cambodia.
"Although this would be the company's first time in entering the energy industry in Cambodia, we are confident that the said acquisition will bring significant increase to our oil and gas reserves.
Block E is located offshore Cambodia in Khmer Basin right by the North West Coast of Cambodia and consists of approximately 5,000 square kilometers.
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