Medco bidding for 5 oil blocks to boost output

Medco bidding for 5 oil blocks to boost output

Dow Jones, Jakarta

Indonesia's PT Medco Energi International (Medco) has put in bids for stakes in four oil and gas blocks operated by ConocoPhillips and for a stake in one block operated by Equatorial Energy Inc., a Medco official said late Wednesday.

Medco will use proceeds from a US$250 million bond issue earlier this year to help finance the acquisitions, the official said.

ConocoPhillips is selling its 31.25 percent stake in Kakap Block, 50 percent stake in Block A, 100 percent stake in Tungkal Block and 45 percent stake in South Jambi B Block as part of its plan to improve returns on capital and reduce debt.

Kakap Block, located around 480 kilometers northeast of Singapore, currently produces 2,900 barrels of oil a day (bpd) and 20.3 million cubic feet a day of natural gas. Block A in northern Sumatra is expected to produce 56 million cubic feet of gas a day by 2006.

The Tungkal Block in southern Sumatra is expected to commence production in 2006 at an initial rate of 5,000 bpd. The South Jambi B Block in southern Sumatra is expected to begin production in the first quarter of 2004 at rates averaging 11 million cubic feet of gas a day, eventually increasing to 42 million cubic feet a day for export to Singapore.

The size of the stake Medco seeks in Equatorial Energy's Sembakung Block in East Kalimantan is unclear. The block produces 5,303 bpd of oil.

Medco plans to acquire 10 oil and gas blocks this year as part of its plan to increase output to 200,000 barrels of oil equivalent a day by 2007 from 80,000 currently.

Thailand's PTT Exploration & Production PCL owns a 34 percent stake in Medco.