Indonesia’s largest publicly traded energy company, Medco Energi Internasional, announced on Tuesday that it would continue with plans to explore an oil field in Libya and is preparing to establish a joint venture next month for that task.
Medco Energi president director Lukman Mahfoedz said the company, through its subsidiary Medco International Venture Limited, would own 25 percent of the stake in the joint venture.
The Libyan government would own 50 percent and another oil contractor the remaining 25 percent.
“The joint operating company will develop the project,” Lukman said in Jakarta, adding that Medco would build supporting facilities for the project, among other contributions.
The plan to develop the Area 47 block was postponed last year following increasing political tensions in Libya. A preliminary engineering study to support the development plan, however, was conducted after tensions eased.
Last year, Medco and partners drilled 26 wells to explore the block that is estimated to contain some 2.15 billion barrels of oil. Lukman said around 50,000 barrels of oil per day can be pumped from Area 47. The entire project cost a total of $800 million.
“We’ve allocated $200 million for the next four years,” he said on Tuesday, adding that the fund would come from Medco’s internal cash and bonds.
Medco Energi raised Rp 1.5 trillion ($159 million) from selling five-year bonds in June. The company plans to spend the proceeds to acquire assets for producing oil and gas in Indonesia as well as overseas.
Medco Energi in July took over a 21.25 percent stake in Yemen’s Block 9 oil field through its local unit Medco Yemen Malik. It purchased the stake for $95 million.
Medco Energi produced 14.7 million barrels of oil and 61.6 billion cubic feet on natural gas last year. Its oil and gas assets are estimated to contain some 228 million barrels of oil-equivalent.
Net income at Medco Energi increased to $12.1 million in the first quarter, up 23 percent from the first quarter of last year, while its revenue climbed 11 percent to $282.2 million. The company last year reported net income of $85.1 million on revenue of $1.14 trillion.