Medco decides to withdraw from Nunukan block

By Godang Sitompul

IDX-listed energy company PT Medco Energi Internasional Tbk said it has decided to withdraw from the Nunukan PSC in North Kalimantan.

Medco President Director Lukman Mahfoedz said that previous explorations in the block showed much smaller gas resources than had been originally expected.

?Given that there is no existing infrastructure in the area, and the need for a high gas price (for the project) to be (more) economical, Medco deems the development to have a high risk profile,? Lukman said, adding that past experiences showed that the development of infrastructure in such a remote area may take longer time than expected.

He said that the company has started the process of withdrawal from the block with the upstream oil and gas authority SKK Migas in April of this year.

The Nunukan PSC is operated by stated-owned oil and gas firm PT Pertamina?s subsidiary PT Pertamina Hulu Energi with a 35 percent interest. Other investors in the block are Indian firms Videocon Industries Limited and Bharat PetroResources Limited.

Editing by Reiner Simanjuntak