Medco wants listing in New York by 2002, forms strategic alliance with Petronas

The largest national private oil and gas company PT Medco Energi International said it planned to list its stocks on the prestigious the New York Stock Exchange by year 2002, and then form a strategic alliance with other oil firms, including Petronas of Malaysia.

Company director Hilmi Panigoro said that the company's assets were currently still too small for listing in New York, and therefore, it was boosting its asset value by increasing production through new exploration and acquisitions of other fields so that by 2002, its asset value would reach at least $1 billion, compared with between $300 million and $400 million now.

"We're talking here about an international stock market, if we're too small no one will notice us," he said. "This means we must boost production and reserves to the point where our size becomes attractive."

Meanwhile, Medco founder and now member of the company's board of council Arifin Panigoro said that after listing on the New York Stock Exchange, Medco would look out for strategic partners to strengthen its global competitiveness.

He cited Malaysian Petronas as a potential partner to Medco. "We've been in talks for quite some time," he said

Hilmi projected that by the end of this year, Medco's crude oil production levels would reach over 70,000 barrels per day (bpd) from the current 60,900 bpd.

He further said that in order to maintain the company's current production level, it was investing heavily in exploration activities. This year alone, he said, Medco will spend some $24 million for exploration drilling.

"Our spending for exploration drilling will reach record highs," he said, adding that Medco's average spending on exploration drilling ranged between $5 million to $10 million per year.

He said the company's current proven reserves are 300 million barrels. But it needs to find new reserves of some 24 million barrels per year to maintain a production level of 70,000 bpd, Hilmi said. To reach that level, the company has been active in acquiring oil fields from other companies.

In February this year, the company acquired the interest of Union Texas Tomori Inc in the Senoro and Toili blocks off the coast of Sulawesi with proven reserves of 100 million barrels of oil and 2.1 trillion cubic feet of gas respectively. In January, the company acquired majority stakes in Western Simenggaris Petroleum Pty. Ltd, which runs oil and gas operations in East Kalimantan, and in Western Madura Pty. Ltd., which operates oil and gas fields in Madura, East Java. (*)