Medco, Anadarko sign joint exploration agreement<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
In a bid to intensify efforts to discover more oil, Indonesia's
\nlargest oil firm, PT Medco Energi Internasional, and U.S. giant
\noil explorer Anadarko Petroleum Company have signed a joint
\nventure agreement on exploration activities in the country.<\/p>\n
Anadarko will finance Medco's exploration program and cover
\nall risks in the development of 13 blocks owned by the publicly
\nlisted company in Indonesia for the next three years, Medco chief
\nof corporate growth Rashid Mangunkusumo said on Tuesday.<\/p>\n
\"If exploration fails, Anadarko will get nothing,\" said
\nRashid. \"(However), if it succeeds, the company will get 40
\npercent of Medco's share in the area,\" he said.<\/p>\n
Anadarko vice president for international business development
\nJohn Harkins said the company was prepared to channel at least
\nUS$80 million into the project over a three-year period.<\/p>\n
\"The quality of the exploration acreage is excellent,\" Harkins
\nsaid.<\/p>\n
The 13 blocks include seven new, unexplored areas, including
\nNunukan and Simenggaris in Kalimantan and six producing blocks,
\nincluding Tuban in East Java.<\/p>\n
With the agreement, which is subject to a due-diligence
\nprocess scheduled to be completed on Aug. 12, Medco expects to
\naccelerate its exploration activities.<\/p>\n
Rashid said the joint venture would allow the company to drill
\ndeeper -- something many firms have postponed here due to high
\ncosts and risks -- and gain from Anadarko's extensive exploration
\nexperience and technology.<\/p>\n
Medco has budgeted $130 million for exploration in the next
\nthree years, which may be adjusted with the additional funds from
\nAnadarko. This year, Medco is planning to spend between $20
\nmillion and $30 million on exploration activities.<\/p>\n
The company reported an audited net income of $19.9 million in
\nthe first quarter of the year, slightly lower than $20.1 for in
\nthe same period last year due to higher costs and taxes. Rising
\noil prices boosted Medco's net revenues by 18 percent in the
\nperiod to $130.5 million, from $110.6 million last year.<\/p>\n
Medco's share ended Rp 150 (about U.S. 1.5 cents) lower at Rp
\n3,350 on Tuesday.<\/p>\n
Anadarko is one of the world's largest independent oil
\ncompanies, with assets amounting to $20 billion and proven
\nreserves reaching 2.37 billion barrels of oil equivalent.<\/p>\n
Anadarko, through its local unit Anadarko Indonesia Company,
\nwas awarded exploration and production rights on the North East
\nMadura III block in East Java last year, its first oil block in
\nthe country.<\/p>\n
Harkins said the company was \"actively interested\" in looking
\ninto the 27 blocks on offer by the government, but declined to
\nelaborate.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/medco-anadarko-sign-joint-exploration-agreement-1447893297",
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"sponsor": "Okusi Associates",
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