Govt extends Medco's oil contracts

The Jakarta Post, Jakarta

The government has extended contracts held by energy firm PT Medco Energy International Tbk permitting its exploitation of the Rimau Block in South Sumatra and the Tarakan Block in East Kalimantan, the company said on Wednesday.

The contracts covering both blocks were extended by 20 years, the company said in a statement, adding the extensions had been signed by state oil and gas company Pertamina and approved by the Ministry of Energy and Mineral Resources.

The Rimau Block contract has been extended from April 23, 2003 to April 23, 2023, and the Tarakan Block contract from Jan. 14, 2002 to Jan. 14, 2022.

Rimau Block is operated by Medco units Exspan Airsenda Inc. and Exspan Airlimau Inc, while Tarakan Block is run by PT Exspan Tarakan.

"With the extensions, the company will have more flexibility to continue developing the two oil and gas fields to further increase production," it said.

Rimau Block, now producing 83,883 barrels of oil equivalent per day (boepd), contains proven reserves of 153 million barrels and probable reserves of 185 million barrels.

Tarakan Block, now producing 1,200 boepd, is believed to contain an oil reserve of 1.4 million barrels.

Medco currently produces 91,000 boepd.