Mon, 25 Dec 2000

Medco deals with energy business, environment and community

As a company dealing in the energy business, PT Medco Energi Internasional has shown a deep concern for the environment and the community.

Medco realizes that its line of business has a direct impact on the environment and the communities around its projects. That is why since the company has taken a special interest in their preservation since the very beginning.

Medco is an Indonesia-based integrated energy company dealing with oil and gas exploration and production; onshore and offshore drilling services; downstream industries in petrochemicals; and distribution. Medco comprises a number of subsidiaries and affiliated firms.

Company President John S. Karamoy said that Medco had always set measures to answer various community and environment issues.

He said that preventive measures were planned to find several environmental problems, such as noise disruption caused by compressor operations and increased temperature from flare pits.

In terms of community assistance, Medco has been also involved in various community development programs, he added.

This includes the development of clinics, schools and jobs for local people, which have a direct impact on the economy of the surrounding areas, he said.


According to Karamoy, Medco has a corporate safety and environment policy which requires every corporate individual to prioritize safety and to be aware of safeguarding the environment and consciously carry out a safe working environment.

"The company has a Safety and Environment department, where familiarization of safe working practices are passed on to the company's work forces, in addition to environmentally friendly practices," he said.

To avoid pollution, produced formation water is reinjected back into the original formation, which resulted in zero water discharge of the company's operations.

"So far, this is done in the project in Sumatra. We expect to see the same level of zero discharge in Kalimantan operations by next year," Karamoy said.

He said that Medco currently planned to utilize produced gas which is, at present, flared. The company also conducted studies to reinject the gas. For its LPG plant, the company also planned to market gas produced to local buyers, which was currently under negotiations with Pertamina.

Karamoy said that in terms of noise pollution, most of Medco's operations are located far from residential areas, therefore, the noise disruption caused by compressor operations and increased temperature from flare pits would not affect residents.

Environmental and safety concerns are prime elements of standard operational procedures. Each of Medco's subsidiaries has to conduct activities without damaging the physical and social environment.

For instance, at Exspan, one of Medco's subsidiaries, the health and safety record is considered exemplary.

Community development

Medco, the largest national private oil and gas company, is actively involved in community development programs.

As a member of the industrial community which takes responsibility in the neighboring environment, Medco has promoted a caring attitude toward local problems, which is demonstrated by the involvement of the company in providing donations as part of the community development programs.

In general, the assistance includes four items: environment, education, welfare and emergency situation.

For example, Exspan, which operates projects in Riau and East Kalimantan, has established rice fields to provide a meaningful effect in solving food supply problems. Exspan has also introduced permanent agriculture technics to local farmers in an attempt to reduce and eliminate the practice of slash-and-burn methods.

According to Karamoy, Medco has also supported various social services, including the development of a road linking Tanjung Lubuk to Pendopo, and the maintenance of roads, religious centers and schools. There are also other programs on clean water projects and training on agribusiness.

In addition, Medco provides scholarships to hundreds of students to study at public universities in Palembang, Riau, Balikpapan, Bandung and Yogyakarta. There are also annual scholarships for elementary school and junior high-school students.


Medco was initiated as a company called PT Meta Epsi Pribumi Drilling Company, which was established in June 1980 to engage in onshore contract drilling services across Indonesia. The company launched an Initial Public Offering in October 1994 to become the first energy company listed at the Jakarta Stock Exchange.

Medco's major business lines include oil and gas exploration and production; onshore and offshore drilling services; and methanol production.

Medco operates 12 exploration and production working areas, comprising three types consisting of Production Sharing Contract (PSC), Technical Assistance Contract (TAC) and Joint Operating Body (JOB).

The company booked Rp 530 billion in net profits in the third quarter of this year, almost twice the Rp 282 billion recorded during the same period last year.

As a publicly listed company, Medco is committed to complying with all relevant regulations and requirements. The company's goal is to maintain the highest ethical standards possible from the standpoint of an industry society as a whole.