Medco Energi acquires interest in Yemen
Monday, August 6 2012 - 09:23 AM WIB
PT Medco Energi Internasional Tbk, through its wholly owned subsidiary Medco Yemen Malik Ltd., has signed a sale and purchase agreement (SPA) with Reliance Exploration & Production DMCC (REPDMCC) to acquire 25 percent participating interest in Block 9 (Malik), Republic of Yemen on 5th July 2012, with effective economic date of 1 January 2012.
The company said in a press statement on Monday that now Medco Energi and REPDMCC were in the process of finalizing the SPA.
Completion of this transaction is conditional upon approval from the Ministry of Oil and Minerals of Yemen. Upon the Completion of this transaction, Medco Energi will effectively have 21.25% participating interest (after taking into account a proportionate carried share of Yemen Oil and Gas Company or (MYOGC).
Thus, the structure of participating interest ownerships in Block 9 (Malik) Production Sharing Agreement will be 42.50 percent owned by Cal Valley Petroleum (Cyprus) Ltd as the Operator, 21.25 percent owned by Medco Yemen Malik Ltd., 21.25 percent by Hood Oil Limited, and 15 percent by YOGC.
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.
?This acquisition is in accordance with the company?s strategy to strengthen portfolio of producing assets. After acquiring two exploration blocks in 2009, this acquisition has set up another stepping stone for the company for its bigger growth agenda in MENA countries in general, and particularly in Yemen,? said Lukman Mahfoedz, President Director and CEO of MedcoEnergi.
?We have met with the Government of Yemen recently and they have shown their support for our bigger presence in the country,? he added.
Editing by Benget Besalicto Tnb.