Medco updates on assets optimization exercise for its selected Indonesian oil and gas properties

(JAKARTA, 2nd July 2008)--After conducting an open tender to several oil and gas companies and after receiving several attractive offers, PT Medco Energi Internasional Tbk (?Medco Energi/the Company?), would like to provide an update on our E&P asset optimization program from selected oil and gas interests in Indonesia. The selected E&P properties offers are as follows:

? Minority Working Interest of Rimau PSC
? Minority Working Interest of Lematang PSC
? Entire Working Interest of Kakap PSC
? Entire Working Interest of Langsa TAC
? Entire Working interest of Tuban PSC
? Partial Working Interest of Bawean PSC
? Entire Economic Interest of Jeruk Field

The objective of this program is to promote good risk management and good corporate governance, to have the opportunity to gain technology from new partners, to better reshape our asset portfolio, and strengthen the Company?s balance sheet. In addition, this program will enable the Company to reallocate valuable human resources to other assets which may bring higher returns.

It is the Company?s commitment to continue with good risk management practice by sharing Mute operational risks with new partners. The introduction of new partners is also expected to promote farther transparency and accountability in blocks where the company is the majority interest holder. MedcoEnergi is also keen to have partners who can contribute and share new technological expertise (particularly related to enhanced oil recovery technologies).

The exercise is also expected to baiter strengthen the Company?s balance sheet whereby the cash proceeds from sale of existing assets are to be reinvested in the Company?s Seven Major Projects in which the Company is committed to deliver over the next five years, (including Senoro Gas Development and Block A), which will reduce reliance on mature assets). The Company expects that this exercise can be completed before the end of third quarter 2008.

Darmoyo Doyoatmojo, the President Director of MedcoEnergi said: ?The Exploration and Production assets optimization program is expected to leverage off current favorable market valuations to monetize mature assets while simultaneously improving the Company?s cash position.? Larry L. Luckey, the Corporate Planning and Strategy Director of MedcoEnergi added: ?We believe that this exercise will showcase the value of the Company?s assets and consequently improve both MedcoEnergi?s stock price and shareholder value.?

MedcoEnergi is a publicly listed integrated energy company in Indonesia, with business involvement in oil and gas exploration and production methanol production, LPG production and power generation. It has operations in Oman, Libya, and the Gulf of Mexico in the United States on top of several areas in Indonesia. (end of release)