JP\/13\/MEDCO<\/p>\n
Medco to get $190m in compensation for Jeruk<\/p>\n
Leony Aurora
\nThe Jakarta Post\/Jakarta<\/p>\n
Indonesian energy giant PT Medco Energi Internasional will cash
\nin on its calculated gamble in drilling wells in the Jeruk oil
\nfield by claiming US$190 million in compensation from the field's
\noriginal partners, Cue Energy and Singapore Petroleum Company
\n(SPC).<\/p>\n
The publicly listed company's CEO Hilmi Panigoro said on
\nMonday he received a confirmation last Friday that Cue Energy and
\nSPC intended to reclaim their rights on Jeruk, a big oil field
\nlocated in East Java.<\/p>\n
Consequently, \"They have to pay for all of the costs we have
\nincurred on Jeruk, which is about $30 million, within 30 days
\nafter the letter,\" he said.<\/p>\n
The two firms would also have to pay penalties worth between
\nthree times and 10 times for seismic observation and the drilling
\nof the first and second wells, he added.<\/p>\n
\"The total penalty is about $190 million,\" said Hilmi. The
\nfunds -- almost triple the net profit of $70.1 million that Medco
\naccumulated last year -- would be paid after Jeruk started
\npumping oil, which is estimated top be in 2008.<\/p>\n
However, should the field produce between 50,000 and 60,000
\nbarrels of oil per day, then the penalty would be paid off within
\none year, added Hilmi.<\/p>\n
Australia's third largest oil and gas producer, Santos Ltd.,
\npreviously partnered up with Cue Energy and SPC to explore and
\nmanage Jeruk, with 45 percent, 15 percent, and 40 percent of the
\nconcessional rights, respectively.<\/p>\n
Two years ago, when the two junior partners refused to take
\nthe risk of exploring the field, Santos and Medco signed an
\nagreement to have a 50-50 share in the drilling of wells.<\/p>\n
They struck gold when they found the equivalent of between 350
\nmillion and 500 million barrels of oil in the field, far more
\nthan the previous certification of 170 million barrels.<\/p>\n
Medco had previously said it was considering maintaining some
\nshares in the field.<\/p>\n
\"Our contract did not allow that. However, we are very happy
\nwith the compensation,\" said Hilmi.<\/p>\n
Medco, the largest Indonesian-controlled private oil company
\nhas been aggressively expanding its business, most recently by
\nacquiring 100 percent of Australian-based energy firm Novus
\nPetroleum Ltd. for A$350 million last year.<\/p>\n
With surging oil prices and significant additional oil and gas
\nreserves from its new subsidiary, Medco's net profit in 2004
\njumped almost 30 percent to $70.1 million from $54.1 million in
\nthe previous year.<\/p>\n
Revenues increased 19.2 percent to $535.1 million last year
\nfrom $449 million in 2003, with the crude oil price averaging
\nhigher at $36.78 per barrel from $29.33 per barrel in the
\nrespective periods.<\/p>\n
I-Box<\/p>\n
London IPO set for July, road shows June<\/p>\n
The time table for Medco's initial public offering (IPO) in
\nLondon Stock Exchange is being finalized, with the event
\nscheduled for mid-July, CEO Hilmi Panigoro said.<\/p>\n
\"We will make non-deal road shows to Hong Kong and Singapore
\nin May,\" Hilmi said.<\/p>\n
After that, in June, the company would conduct official road
\nshows to Asian cities as well as London and several cities in the
\nU.S., namely Los Angeles, New York, San Francisco, Philadelphia,
\nand Boston, he added.<\/p>\n
In a bid to go further in the international market, Medco is
\nplanning to sell some 1.5 billion shares, or 40 percent of its
\nstake, and list its shares on the London bourse.<\/p>\n
Medco's share ended unchanged at Rp 2,575 on Monday.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/jp13medco-1447899208", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }