Medco completes acquisition of Yemen block interest
Tuesday, December 4 2012 - 10:33 AM WIB
Medco Yemen Malik Limited, a subsidiary of PT Medco Energi Internasional Tbk. completed on Tuesday the agreement with Reliance Exploration & Production DMCC to acquire a participation interest of Block 9 (Malik) in the Republic of Yemen.
The sales and purchase agreement was signed on July 5 this year under which Medco is to pay US$90 million for the interest. The transaction obtained approval from the Ministry of Oil and Minerals of the Republic of Yemen on Nov. 24, Medco said in a statement on Tuesday.
Upon the effectiveness of the transaction, Medco Yemen holds 21.25 percent interest in the block with Calvalley Petroleum (Cyprus) Ltd as the operator. The structure of the participation interest ownership in the block is as follows: Calvalley Petroleum (Cyprus) ltd: 42.50%, Medco Yemen: 21.25%, HoodOil Limited: 21.25%, Yemen Oil and Gas Company: 15.50%.
Block 9 is an exploration and production block located in the province of Hadramaut, Republic of Yemen, about 350 kilometers north-east of the Yemeni capital, Sana?a. The Block, which is located within the Sayun-Masila Basin, has an area of 2,234 square kilometers, in which some of its area has previously been explored.
On 25 August 2005, the Government of Yemen has granted the construction license for the Block for the period of 20 years. The license also slates that the holders of participating interest of the block has the right to negotiate for an extension of another 5 years after 2025.
The estimated gross 2P reserves of Block 9 is approximately 58.6 mmbo (as of 1 January 2012) and is envisaged to produce up to approximately 14.5 mbopd. Discoveries in Block 9 include four oil fields.
Editing by Johannes Simbolon