Medco suspends production at two fields in S. Sumatra

Oil and gas firm PT Medco E&P Indonesia, a subsidiary of IDX-listed energy concern PT Medco Energi Internasioal Tbk, has been forced to suspend production activities at the Lica and Meta fields in South Sumatra Block since June 21 due to road and river transportation blockade by people in Dana Cala Village, Lais District, Musi Banyuasin Regency, reports said Thursday.

Teguh Imanto, a senior manager at Medco E&P Indonesia said that the blockade has hampered the transportation of crude from the fields to the Matra storage station in Musi Banyuasin.

?Crude production from Meta and Lica is about 1,000 bpd, or 2 percent of current total oil and gas production of Medco E&P,? Teguh said as quoted by news portal Okezone.com on Thursday.

Teguh said that his company has reported the production suspension to the upstream oil and gas authority. The company also has filed reports with the local police and military office, while continuing talks with the protesting villagers via mediation by the local government.

Meanwhile, Liputan6.com quoted SKK Migas public relations head Handoyo as saying that the villagers demanded extra compensation for land already acquired and paid by Medco in 2006, as well as honorarium for local villagers helping to protect areas around the two fields. Handoyo said that Medco has made the payment via the Danau Cala Village head.

Meanwhile, President Director of Medco Energi Internasional Lukman Mahfoedz was quoted by Liputan6.com as saying Wednesday that such social problem if not immediately resolved would undermine efforts by the government to lure badly needed investment in the oil and gas sector. (*)