Medco gearing up for full development of Area 47 in Libya

PT Medco Energi Internasional, through fully owned subsidiary Medco International Ventures Limited ? Libya (MIVL), will begin a full development of A, D, F fields within the Area 47 block, Libya, following the so-called Commercialization Declaration for the fields isssued by the country?s Management Committee of Area 47.

The Declaration means that participating interest holders, Medco Energi and Libyan Investment Authority (LIA), can now start the development of the fields and receive US$374.3 million in cost recovery based on an audit approved by the National Oil Corporation (NOC). The fund represents 98.4% of exploration costs spent by MIVL and LIA up to December 31, 2010.

This scheme is in accordance with the Exploration and Production Agreement (EPSA) IV signed in March 2005.

In a statement, Medco said the company and its partner will soon begin constructing production facilities in the areas designed with 50,000 barrels of oil per day production capacity, scheduled for completion within the next 36 months. Engineering works will start in 2012, followed by construction works a year later.

The budget for the development of these production facilities is estimated to hit US$800 million, to be funded jointly by NOC, Medco and LIA. Commercialization for other oil and gas fields within the block will also be carried out.

?This Commercialization Declaration is a significant development for the company. In 2008, the company stated that certified reserve according to DeGolyer MacNaighton stood at around 352 MMBOE. This excluded the findings from latest exploration results in the last few years,? President Director of Medco Energi Lukman Mahfoeds said in the statement. (godang/giok)