Medco?s Libya project to start production in 2010

IDX-listed energy firm PT Medco Energi International Tbk. is seeking as much as US$275 million worth of loans to develop its oil block in Libya.

Medco?s Project Director Lukman Mahfoedz said the so-called Area 47 project in Libya would cost $800 million for facility construction and $300 million for development ?Of the total cost of US$ 1.1 billion, Medco will only contribute 25 percent,? he said.

Area 47 is estimated to have contingent reserves of 307 million barrels of oil, he said.

Under the production sharing agreement, Medco and partner Canada-based Verenex jointly own 13.7 percent of the reserve while Libya?s National Oil Company owns the remaining 86.3 percent once the block starts production, he said

The field is expected to begin producing oil at the end of 2010 at about 50,000 barrels per day (bpd), he added.

?We are currently doing a detailed study before we enter front end engineering design (FEED) phase," he said.

President Director Darmoyo Doyoatmojo said he was optimistic the company would secure the required loans.

?Once a reserve has been found, the project?s risk will be very small,? he said, adding Medco had talked with several banks about loans. ( denny)