Medco Energi to buy Lasmo's Malacca Straits
JAKARTA (JP): Publicly-listed oil company PT Medco Energi Corporation is acquiring a 23.4 percent interest in the Malacca Straits Production Sharing Contracts area from Lasmo Oil (Malacca Straits) Ltd. of Britain and its affiliates.
President of Medco Energi, Hetriono Kartowisastro, said yesterday that his company signed an in-principle agreement with Lasmo in May. However, he declined to mention the value of the acquisition, saying that the acquisition process is not final yet.
"The acquisition of Lasmo's interest is still subject to their partners' preemption rights and an approval from the state-owned oil company Pertamina," Hetriono said after attending the annual Medco shareholder meeting.
He added that the operatorship of the oil contract area will be transferred to a specially designated subsidiary of Medco.
Medco is the first oil company listed on the Jakarta Stock Exchange. It floated 21.7 percent of its enlarged capital base through an initial public offering on the exchange last October.
Medco is a holding company of four subsidiaries, including onshore drilling company PT Meta Epsi Antareja, offshore drilling firm PT Apexindo Pratama Duta and two other oil and gas exploration and production companies PT Etaksatria Petrasanga and PT Eksita Pantranagari.
John Karamoy, president of Etaksatria and Eksita (Expan), said the Malacca Straits contract area currently produces some 25,000 barrels per day (bpd) of crude oil. "If we proceed with the acquisition, we will control one third of that level."
Medco's oil production level stood at an average of 5,389 bpd last year, decreasing by 4.6 percent from the previous year's level of 5,638 bpd.
Methanol
The shareholders' meeting agreed on the company's plan to take over the operation of the Bunyu methanol plant in East Kalimantan from Pertamina.
"We received approval from Pertamina early this year, and the operating agreement is currently under negotiation. We expect to begin the operation of the methanol plant later this year," said Sugiharto, Medco's finance director.
The Bunyu plant, which has an annual production capacity of 330,000 metric tons, is currently the only methanol plant in the country.
The Humpuss Group, through its subsidiary PT Kaltim Methanol Industry, is building the country's second methanol plant in Bontang, East Kalimantan, with an annual capacity of 660,000 metric tons, which is expected to start its commercial production in 1997.
Yesterday's meeting also approved Medco's plan to diversify its operations into power generation.
Hetriono said his company, in a fifty-fifty partnership with Enron Development Co. of the United States, is in the final stage of negotiations with the government for a build, own and operate (BOO) contract for a 136 megawatt gas-fueled power plant in Samarinda, East Kalimantan.
He added that the construction of the plant is projected to start next year with the first 68-megawatt unit to start operating in 1997 and the second in 1999.
At the shareholders' meeting, the company reported a net income of Rp 18.4 billion (US$8.26 million) with earnings per share of Rp 181.6, 37 percent higher than last year's Rp 13.4 billion.
However, the company's profit margin decreased by 17.9 percent because of the international oil price volatility and the decrease in average oil price to an average of $16.15 per barrel as compared to $17.55 in 1993.
This year the company expects a 50 percent increase in net profits. "We are confident with our projection of a 50 percent increase in net profits because of the better oil prices and the expansion of our operations, including the methanol plant, the Malacca Straits oil field and the operation of our new jack-up rig," Sugiharto said. (rid)