Oman extends Medco?s contract

The Sultanate of Oman through its oil and gas firm Petroleum Development Oman (PDO) has extended the contract of Medco LLC, a subsidiary of IDX-listed energy firm PT Medco Energi Internasional Tbk, for a 25-year period in operating the Karim oil fields, Kompas reported on Wednesday.

Managing Director of PDO Raoul Restucci and CEO of Medco Energi Lukman Mahfoedz signed the renewal of the Service E&P Agreement in Muskat on Tuesday. Medco first signed the service agreement in 2006 to operate the fields on behalf of PDO with the objective of arresting decline, increasing production and exploiting the potential of the fields.

Restucci said that PDO decided to extend the contract as Medco has proven itself to be able to manage the aging wells effectively and efficiently in the field, and to arrest declining production rate. Production at the Karim Small Field in 2006 totaled 9,000 bpd, and jumped to 22,000 bpd in May of 2012.

Lukman said that his company aims to maintain production at the Karim Small Field at around 22,000 bpd.

?Since operating at the Karim fields we have drilled 254 wells, and produced 216 million barrels. We have also provided income to PDO as much as US$4.56 billion in eight years,? Lukman said.

Medco?s partners in the contract to operate the Karim fields are Oman Oil Corporation (OOC) - an oil and gas exploration and production company owned by the Goverment of Oman, Kuwait Energy (Kuwait Energy) - a Kuwaiti private invesment company, and two Omani local companies. Their partnership is established through a Joint Venture Agreement (JVA), with the following shareholding Medco Energi (51%), OOC (25%), Kuwait Energy (15%), and Omani Partners (9%). (*)