Medco contests decision on N. Sumatra geothermal concession award

Geothermal unit of IDX-listed energy firm PT Medco Energi International is contesting decision by North Sumatra regency of Mandailing Natal to award exploration right of a geothermal concession to a consortium of Indonesia-India- Australia companies.

Geothermal Director at the Ministry of Energy and Mineral Resources Sugiharto Harsoprayitno told Petromindo.com on Tuesday that Medco has filed lawsuit of Jakarta Administrative Court contesting the regency?s decision to award Sorik Marapi geothermal concession to the consortium.

According to Sugiharto, Medco filed the lawsuit as it considered it self as the rightful winner in a tender held by the regency to determine the developer of Sorik Marapi concession as it offered lower price that that of offered by the consortium.

Sugiharto told Petromindo.Com in May 2010 that there were five bidders submitted price proposal for Sorik Marapi. The five bidders were PT Cahaya Lentera Mas, which offered to build a 330 MW power plant with a selling price of 7.33 US cents per kwh, PT Medco Geothermal Energy (305 MW, 7.96 cents); PT Supraco (240 MW, 8.1 cents); Chevron Corp (240 MW, 8.88 cents); and PT Star Energy Investment (220 MW, 9.65 cents). A source later told Petromindo.Com that Cahaya Lentera Mas was not considered despite the lowest price it offered due to its technical incompetence.

The regency government declared Supraco consortium as winner in August this year.(bernard)