For Advertorial, 13 August 2004

For Advertorial, 13 August 2004

PT Medco E&P Indonesia's Comdev program

'Providing the hook, not the fish'

As a private national oil and gas company, PT Medco E&P
Indonesia (Medco E&P) has paid strong attention to improving the
welfare of the people and preserving the environment surrounding
its work areas since the early years of its operations.

Medco E&P, which changed its name from PT Exspan Nusantara in
April 19, 2004, has made every possible effort to improve the
quality of life of the people surrounding the company's operation
sites.

This commitment is realized through the implementation of the
company's Community Development (Comdev) Program, which covers a
number of activities not only in education and health but also in
the empowerment of the people's economy.

In order to effectively achieve its goals, Medco E&P carefully
formulates its Comdev programs with the help of local
administrations and community leaders. The involvement of local
people is necessary to ensure that the programs can match the
real needs of residents. With this approach, Medco E&P hopes its
Comdev programs will not only meet the basic needs of the people,
but will also enable them to become economically independent in
the long term.

In the field of education, for example, besides providing
educational facilities such as school buildings and laboratories,
Medco E&P also offers scholarships to students from the
elementary school level to the university level. In addition, the
company also pays serious attention to improving the welfare of
teachers.

A number of Comdev programs in the education field have been
successfully implemented. Medco E&P has, for example, built a
junior high school in Talang Ubi village in Muara Enim regency,
South Sumatra, where a number of the company's operation sites
are located. The company also built additional classrooms and a
library at Talang Bonot Elementary School and Talang Air Guci
Elementary School in Rambang Dangku district, Muara Enim, as well
as providing a laboratory and all the supporting facilities at
Sekayu High School in the regency.

A scholarship program is offered to students from elementary
schools to the university level. In addition, the company has
built Islamic schools for junior high school and high school
students in Lais village, Musi Banyuasin (Muba) regency.

Medco E&P is also concerned with issues related to public
health. In this field, besides offering free medical care and
mass circumcisions, the company has provided financial aid for
improvements at hospitals in Sekayu and Muara Enim, and has also
donated a boat that can function as a mobile public health clinic
for people living along the Musi River in Banyuasin regency.

The Empowerment of Small-Size Companies

One of the main priorities of Medco E&P's Comdev Program is to
support the development of small businesses. In cooperation with
local governments, the company provides revolving financial aid
and management training for local farmers. The program has had
good results. The life of Syaifuddin, a farmer in Lais village,
Muba regency, for example, changed for the better after he joined
the company's duck breeding program. He now has more than 1,000
ducks from only 100 ducks when he first joined the program. His
monthly income has also increased from Rp 45,000 to Rp 500,000.

Another resident, carpenter Sugianto, who formerly made doors
and chairs only, now produces cupboards, wooden decorations for
wedding ceremonies and tables after receiving financial and
technical assistance through the company's Comdev Program. Now he
runs a furniture shop in Lubuklinggau and Muba, with a monthly
income of more than Rp 1 million.

Medco E&P also assists fish farmers. At least 44 fish farmers
in Lais and Sekayu, and 10 fish farmers in Petaling village, also
in Muba regency, have benefited from the company's Comdev
Program. With the help of the company, these farmers have been
able to multiply their fish production.

Besides helping farmers, Medco E&P's Comdev Program also
provides financial assistance to small-scale companies. In
cooperation with its subsidiary PT Medco Inti Dinamika, Medco E&P
runs a revolving loan program called Micro Finance Service (MFS).
The program is currently open to small business owners such as
grocers, vegetable sellers, carpenters, traditional bakers and
barbers living near the company's Kaji oil field in Semogra
district, Muba regency. This program has provided loans totaling
Rp 96.60 million and has benefited at least 185 small business
owners.

The company also has a similar program at its operation areas
in Tarakan, East Kalimantan, and Pelalawan regency, Riau.

Environmental Development

Medco E&P pays attention to the environment. In this field,
the company has been actively involved in reforestation programs,
providing seeds for mango trees, durians, leeches, palms, teak
trees and orchids to farmers near its operation sites. Among the
beneficiaries of this program were the residents of Sanga-sanga
village in Kutai Kertanegara regency, East Kalimantan.

In Tarakan, Medco E&P has also introduced a "green" program by
distributing over 6,500 seeds of waru, mahang, polarium, acacia,
bamboo and palm trees to local residents.

Public Facilities

More than 9,000 families in Sekayu, Muba regency, South
Sumatra, can now enjoy clean water from a water treatment plant
(WTP) built by Medco E&P. In Sanga-sanga, Kutai Kertanegara
regency, East Kalimantan, the company has also built mineral
water facilities for residents.

Medco E&P has provided a generator with a capacity of 10 KVA
for the residents of Kerumutan village in Pelalawan regency,
Riau. Some villages in South Sumatra have also received
generators.

Sponsorship for PON XVI

In supporting the 16th National Games (PON) 2004, which will
be held later this year in Palembang, the capital of South
Sumatra, where a number of Medco E&P's oil fields are located,
the company had built an international standard sports hall at a
total cost of Rp 10.5 billion, in addition to its regular
sponsorship for a 10-kilometer run in Sekayu. The sports hall,
which has four badminton courts and a seating capacity of 1,200
people, was inaugurated by President Megawati Soekarnoputri on
June 26 this year.

In 2003, Medco E&P received the PADMA Award from President
Megawati for its success in implementing its Comdev Program and
for its strong commitment to improving the welfare of local
communities.

This achievement proves that the company's motto --
"Developing together with the Community" -- is not merely a
slogan. Helping local communities become economically independent
is not an easy job, but with its concept of "Providing the hook,
not the fish", Medco E&P is sure its community development
programs will be able to stimulate local economic growth.