Mon, 20 Nov 2000

Medco almost doubles 3Q net profit

JAKARTA (JP): Publicly listed oil and gas company PT Medco Energi Internasional booked Rp 530 billion (US$56 million) in net profit in the third quarter of this year, almost twice the Rp 282 billion recorded during the same period last year.

Medco's third quarter revenue increased by 82 percent to Rp 2 trillion from Rp 1.1 trillion for the corresponding period last year, the company said on Saturday.

"These significant increases in revenue and net income were primarily due to an increase in average crude oil production in the first nine months of 2000," Medco said in a press statement.

Medco said that a strong cash flow allowed the company to settle some of its debts as of September 30, this year, thus lowering its outstanding debt to Rp 331 billion.

The company said that revenue from its oil and gas production represented 80 percent of its total revenue, compared to only 64 percent last year.

By the end of September, its crude oil production had risen by 62 percent to 65,000 barrels of oil per day (bpd) from 40,000 bpd in the same period last year, Medco said.

"The continuing strong crude oil prices for the period contributed significantly to Medco Energi's overall revenues," the company said.

According to Medco, average crude oil prices during the nine months of this year reached $28 per barrel of oil, compared to $16 in the corresponding period last year.

Medco said that the growth in crude oil production came from the Semoga fields in South Sumatera, which the company discovered in 1996.

In the first nine months of 2000, Kaji Semoga's oil production rose by 67 percent to 53,300 bpd from 31,900 bpd during the same period in 1999.

However, during the same period gas sales dropped by an average of 67.3 percent from 74.4 million cubic feet per day (mmcfd), the company said.

The company blamed the plunge in gas sales on lower than expected demand from fertilizer and methanol plants.

The company also said that revenues from its offshore and onshore drilling services dropped to Rp 193 billion from Rp 209 billion last year.

Medco also reported a drop in its methanol businesses, due to a 2 1/2 month shutdown of its methanol plant while undergoing a major turnaround.

It said that for the third quarter of 2000, its methanol sales fell to 100,860 metric tons from 206,600 in the same period last year.

Consequently, this year's methanol revenue fell to Rp 76.5 billion from Rp 143 billion last year.

For this year's third quarter, Medco's direct costs rose by 31 percent to Rp 766 billion from Rp 585 billion, the company said.

Medco gave no explanation for the costs increase.

As for the year 2000, Medco said it predicted that crude oil production would reach an annual average of 67,000 bpd and gas sales 70 mmcfd, as a result of continued oil development drilling in all of its operating areas.

In October, Medco's average crude oil production reached 72,200 bpd while gas production reached 67.3 mmcfd, the company added.

Medco also estimated that its rig utilization would increase slightly, as more oil companies were planning to increase drilling activities because of favorable oil price predictions.

Methanol prices, Medco said, had improved considerably since the end of the first semester, and this trend was expected to continue for the rest of this year.

Following the turnaround, the company's methanol plant is producing an average of 930 tons of methanol per day, up from the previous 800 tons.

Medco is Indonesia's largest private oil and gas company, and ranks fourth in size among all of the production sharing partners of state oil and gas firm Pertamina. (bkm)