S&P affirms B+ rating on Medco

S&P affirms B+ rating on Medco

MELBOURNE: Standard & Poor's said on Wednesday it has affirmed
its 'B+' corporate credit rating on Indonesian upstream oil and
gas company, P.T. Medco Energi Internasional Tbk. (Medco). The
outlook is stable.

The rating on Medco reflects the company's short proved
reserves life of 4.9 years, which explains the company's
aggressive push to acquire producing oil blocks in 2003 to
immediately add to its proved reserves base and production
volumes.

The rating on Medco also reflects the company's favorable cost
structure and production track record.

The large size of Medco's operating areas, low labor costs,
and proximity to oil and gas supply infrastructure contribute to
its better-than-average cost structure.

Lifting cost in 2002 was US$2.86 per barrel of oil equivalent
(boe), compared with the global average of $4-$5 per boe. The
company also has moderate, although increasingly aggressive, debt
leverage and strong credit measures. -- Dow Jones