Medco fails to take over Kakap oil block

PT Medco Internasional Tbk has been outbid by its competitor in its effort to take over Kakap oil block in South China Sea's Natuna Islands from American oil major ConocoPhillips, Bisnis Indonesia reported on Thursday.

Medco's operational director, PT Medco Energi International, Rashid I. Mangunkusumo, said in Jakarta on Wednesday that the company failed to take over the Kakap oil block because the price it offered was much lower than the one offered by its competitor.

He did not, however, unveil which company that won the tender to take over the Kakap oil block. "We have been informed by the insider that we have lost in the tender," he said.

Aside from Kakap oil block, Medco also joined the tender launched by ConocoPhillips to take over the latter's stakes in two oil blocks in Jambi, Sumatra, that is Block A and South Jambi B. "Bidders for the two blocks are still being evaluated. We are still waiting for the announcement," he said.

Rashid said that acquiring the Kakap oil block would have been very profitable for Medco because the oil block had started production activities. "Unlike the Kakap block , the Block A and South Jambi B have yet to start production," he said.

Medco has aggressively expanded its oil exploration and production activities in the country by acquiring additional oil blocks from foreign oil companies. Rashid also said that Medco had stopped exploration activities in two oil blocks in Myanmar as part of the company's program to focus on local oil exploration projects. (*)