Medco Buys Yemen Oil, Gas Field Rights
Tito Summa Siahaan
Indonesia’s largest publicly traded energy company, Medco Energi Internasional, announced on Monday that its subsidiary, Medco Yemen Malik, has acquired a share in an oil and gas field in Yemen for $90 million.
“The purchase agreement was signed between Medco Yemen and the previous owner, Reliance Exploration & Production DMCC [REPDMCC] on July 5 and it is now awaiting approval from the Yemeni Energy and Mineral Ministry,” Medco said in a statement released in Jakarta on Tuesday.
Medco now owns a 21.25 percent stake in the venture, as does US-based Hood Oil. The operator and principal owner of the block is Cyprus-based Calvalley Petroleum, with a 42.5 percent stake, while Yemen Oil and Gas Company controls the remaining 15 percent.
Medco said the block holds an estimated 58.6 million barrels of oil and production is expected to reach 14,500 barrels per day. At least four oil fields have been discovered in the block.
Lukman Mahfoedz, Medco’s president director, said on Tuesday that the acquisition was in accordance with the company’s strategy to strengthen its portfolio of productive assets after acquiring two exploration blocks in 2009.
“This acquisition highlights another milestone of the company’s bigger plans in Middle Eastern and North African countries and especially in Yemen,” Lukman said. He added that Medco had received support from Yemen to expand its presence in the country.
The oil and gas block covers 2,234 square kilometers and is located 350 kilometers northeast of Yemen’s capital, Sana’a. The contract for the block development will end in 2025 with an option for a five-year extension.
Medco had previously stated it plans to acquire oil blocks in countries in the Middle East and North Africa with the intention of boosting production to 120,000 barrels per day by 2015 from 80,000 barrels per day now. Without the planned acquisition, the company said production would only reach 90,000 bpd in 2014.
Shares of Medco gained 0.6 percent to Rp 1,710 on Wednesday on the Indonesia Stock Exchange.