Medco says to mop up rest of Novus: Report

Indonesia's largest listed oil company, PT Medco Energi Internasional, said on Monday it has 92 percent of $245 million takeover target Novus Petroleum Ltd, and will mop up the rest of the Australian group, Reuters reported on Monday.

Under Australian law, a bidder can compulsorily acquire the remaining shares in a target once it has secured acceptances for 90 percent of the stock.

Medco has already sold some of Novus's assets to pay for the acquisition.

Australia's Santos Ltd will pay Medco $110 million for an 18 percent stake in the Brantas field in Java, leaving Medco with 32 percent.

Medco has also reached a deal with a privately-held firm on Novus's interests in the United States, the Middle East and Pakistan.

Indonesian oil and gas fields generated two thirds of Novus's operating profit in 2003 and Medco is aiming to boost its production assets in its home market as crude prices surge.

Medco last month secured a $120 million loan from Singapore's United Overseas Bank to finance its bid, and earlier this month launched a five-year bond issue to raise 1.2 trillion rupiah ($127 million).

Although Indonesia is Asia's only OPEC member, its existing production operations are ageing and new developments are lagging. In recent months it has become a net oil importer.

Government officials say the deficit is only temporary, but some analysts say slow energy sector reforms and continued problems with exploration regulations may extend the shortfall. (*)