Medco buying East Java oil field

Medco buying East Java oil field

JAKARTA : Indonesia's oil and gas company PT Medco Energi Internasional is in the process of buying an onshore oil field in Tuban, East Java, from Australia's Energy Equity Corp., a Medco official said Thursday.

Medco's Chief Financial Officer Sugiharto said the two companies signed a preliminary agreement last week.

The deal, however, is subject to conditions, including approval from minority shareholders.

Sugiharto declined to disclose the value of the transaction - giving only a range of US$20 million to $40 million - as the listed company must report it first to the Indonesian capital market watchdog Bapepam.

The field has started production, he said without further details. "So, the field will contribute cash flow to the company this year," he added. --Dow Jones