Medco denies IOC acquisition news

Publicly-listed oil and gas firm PT Medco Energi Internasional Tbk chief executive officer Hilmi Panigoro denied on Wednesday news reports about the purchase of Medco shares by Indian Oil Corporation (IOC), the Bisnis Indonesia newspaper reported in its Thursday edition.

?We do not have a plan to sell our shares. The information is not correct,? Hilmi said on Wednesday. The reports, however, pushed the shares of Jakarta-listed Medco on Wednesday to Rp 1,550 from Rp 1,275 (21.5 percent rise) from the previous day.

But Hilmi mentioned that there is a plan to sell the 19.5 percent stake owned by Credit Suisse First Boston (CSFB) in Medco?s holding company New Link Energy Resources.

IOC is one of the parties interested in buying the stake of CSFB in New Link.

?What is going to happen is the sale of shares in New Link, but not Medco?s shares. If IOC buys New Link shares from CSFB, it will become indirectly the shareholder of Medco, Hilmi said.

Earlier on Tuesday, Indian daily Financial Express (FE) reported that IOC was close to purchasing a 40 percent equity stake in Medco, for around $600 million.

This will be the Fortune 500 company?s first upstream overseas acquisition. Medco is Indonesia?s largest independent upstream company. Its portfolio comprises producing and exploration blocks. Its oil producing properties generate close to 70,000 barrels per day, while its annual gas production stands at around 200 billion cubic feet.(*)