Medco?s plan to buy Kangean gas block still under consideration

Local oil company PT Medco Energi has yet to make a final decision on its plan to take over Anglo-American energy firm BP Indonesia?s interest in the Kangean gas block in East Java, Koran Tempo reported on Thursday.

Medco?s commissioner Arifin Panigoro said in Jakarta on Wednesday that BP Indonesia had asked Medco management if the latter company wanted to raise its bid for its interest in the gas block.

?We have not made any decision on the matter. It is now still under consideration,? Arifin said, acknowledging that Medco?s bid was still far below those submitted by its competitors including China National Offshore Oil Corporation (CNOOC).

According to him, the Chinese company has formally bid BP Indonesia?s interest in the gas block for US$200 million. ?We have been asked to give a higher bid,? he added.

Arifin said that in addition to pay for the acquisition, the bidder should also be able to provide at least US$350 million for the future development of the Kangean block.

BP?s contract in the Kangean will actually ends in 2010 but the company has asked for an early extension of the contract until 2030. But the government has given no response because under the existing regulation, the extension of the contract would be issued only three years before the contract ends. (*)