Medco Energi to Invest $1.7b in Projects by 2014

Jakarta Globe, Muklis Ali, March 30, 2010

Energy company PT Medco Energi Inter national plans to invest $1.7 billion between 2010 and 2014 in several major projects, including oil development in Libya, a company official said.

Medco Energi’s Area 47 oil project in Libya is expected to produce between 50,000 and 100,000 barrels per day and is due to start production in 2014.

“We are waiting for approval from the Libyan government for commercialization of the Area 47 block. We will fund the project with a loan of about $200 million,” Medco president director Darmoyo Doyoatmojo said late on Monday.

“Medco will also apply to the Libyan government to operate the Area 47 project.”

Darmoyo said the company was still optimistic that its liquefied natural gas project in Sulawesi would go ahead in 2014 despite issues over where the gas would be sold and whether the project would be economical.

Medco, together with state oil firm PT Pertamina and Japan’s Mitsubishi, had agreed previously to build the Donggi-Senoro LNG plant in Sulawesi, with a capacity of 2 million metric tons per year. The government wants the gas to be sold only to the domestic market, whereas the partners want to export LNG, which they say is essential if the project is to be profitable.

“This project will provide benefits not only for the companies involved but also for the government,” Darmoyo said.

Other Medco projects are the Sarulla geothermal power plant in North Sumatra, with capacity of 330 megawatts, expected to start operations in 2014, and the Block A gas field in Aceh.

Darmoyo said the Block A project would supply a fertilizer firm in Aceh and was waiting for approval by the governor.

Reuters