Medco, Husky secure oil, gas blocks contract extension

Ministry of Energy and Mineral Resources on Thursday officially signed contract extension of four oil, gas blocks operated by IDX-listed oil, gas firm PT Medco Energi Internasional Tbk and Cannadian oil, gas firm Husky Energy.

Ministry's Director General of Oil and Gas Evita Legowo said that the blocks are Block A PSC onshore Aceh, South Sumatra Extension (SSE) PSC onshore South Sumatra and Bawean PSC in Java Sea, all of which are operated by Medco and Madura Straits PSC offshore East Java, which is operated by Husky.

All the blocks' contracts are extended for another 20 years, she said.

Evita said that total exploration commitments for four blocks are US$155 million and total investment is $4.58 billion.

SSE PSC will supply gas around 128 MMSCFD for fertilizer firm PT Pupuk Sriwijaya and gas-fired power plant in South Sumatra. Block A will supply 110 BBTUD of gas for fertilizer firm PT Pupuk Iskandar Muda (PIM) and PLN in East Aceh.

Madura Strait will supply 100 MMSCFD of gas to fulfill PLN and industries demand in East Java.

The contract for Block A expires in 2011, while SSE will expire in 2013.

The contracts for both the Bawean and Madura Straits will expire in 2011 and 2012, respectively.

Meanwhile, president director Medco E&P Budi Basuki said that Medco would spend $608 million to develop Block A.

He also said that SSE PSC will increase gas output to 170 MMSCFD of gas next year from this year?s target of 150 MMCSFD. Currently oil production from the block stands around 8,000 bpd, he said. (godang/bernard)

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