Indian Oil may buy 40% stake in Medco

Indian Oil may buy 40% stake in Medco

Shares of PT Medco Energi Internasional, Indonesia's biggest
publicly traded oil and gas company, rose on a report that Indian
Oil Corp. may buy a 40 percent stake in the company.

The shares surged Rp 275, or 22 percent, to Rp 1,575.

Mumbai-based Indian Oil is India's biggest oil refiner. The
company may buy the Medco stake for US$600 million from
Thailand's PTT Exploration & Production Plc. and an American
mutual fund, India's Financial Express newspaper reported, citing
an unidentified Indian Oil official.

The price that the Indian company may pay, or 45 cents a
share, equals Rp 4,156 a share using an exchange rate of Rp 9,235
a dollar at 12:11 p.m. Jakarta time. Medco had a total of 3.33
billion shares outstanding as of March 31, 2004, according
to Bloomberg data.

Medco expects its oil and gas output to soar by 18 percent
after acquiring a majority stake in Australia-based Novus
Petroleum Ltd. in June.

It said that by taking into account Novus' production, the
company expected its oil and gas production to increase this year
to 33 million barrels of oil equivalent (MMBOE) from 28 MMBOE
last year.

Medco -- which was founded by businessman-turned-politician
Arifin Panigoro -- also expects that its proven oil and gas
reserves as a result of the acquisition will increase by 50
percent to about 210 MMBOE from 140 MMBOE as of the end of last
year. -- Bloomberg