Medco to submit Aceh gas block PoD this month

JSX-listed energy firm Medco Energi Internasional Tbk will submit plan of development (PoD) for gas field in Aceh Block A PSC for approval within two weeks’ time, a company official said on Thursday.

Medco EP CEO Lukman Mahfoedz told reporters that the PoD would come with proposal to extend the block’s contract by another 20 years to 2031. The block’s partnership would spend US$500 million to develop the gas field, which would expected to commence production in 2010, he said. Medco EP is an upstream unit of Medco Energi.

Medco is currently in gas supply talks with Aceh fertilizer maker PT Pupuk Iskandar Muda (PIM), which may act as sole offtaker of the block’s gas, he said.

The block could produce up to 110 MMCFD of gas with further upside potential, Medco Energi Director Rashid Mangunkusumo said in May 2007, adding that Medco wanted to sell gas from Block A at price above US$4.5 per MMBTU.

Medco and partners will receive 49 percent production split from the block, higher than the rate of 30 percent normally given to standard PSC contractors.

The block is operated by Medco with a 41.67 percent interest. Other participants are Japex (16.67 percent) and Premier Oil (41.67 percent).  (godang)