Medco to up gas output by 10% in 2006

PT Medco Energi Internasional, the country's largest locally controlled oil and gas company, expects gas production to increase by 10 percent to 150 million standard cubic feet per day (mmscfd) in 2006, while oil output will likely remain flat.

The company will produce between 56,000 barrels and 60,000 barrels per day (bpd) of oil next year, president director Hilmi Panigoro said on thursday.

"Production from the Sembakung block is just enough to offset the declining output from other fields," said Hilmi, referring the block in East Kalimantan the company recently acquired and is expected to contribute 4,600 bpd to the company's oil portfolio starting in the last quarter of this year.

Gas production will rise from 135.8 mmscfd currently, said Hilmi, as the company develops its field in South Sumatera.

Medco will spend US$300 million in 2006 to drill 24 exploration wells, 131 development wells and to develop the onshore Lematang block in South Sumatra. "We intended to develop Lematang this year, but as it turns out that plan was postponed to next year," said Hilmi.

Medco reported an increase of 44 percent in net profit in the first nine months of the year, to $68,4 million from $47,8 million last year on higher crude oil prices.

Sales in that period rose to $442.3 million from $392.6 million.(*)