Pertamina will indirectly own 27.9 percent of Medco Energi

Pertamina has finally agreed in principle to buy part of Encore International Limited shares, a transaction which will allow the state oil and gas company to indirectly own a 27.9 percent stake in publicly listed oil and gas company PT Medco Energi Internasional.

Pertamina said in a press statement that it had signed ?principles of agreement? with Encore International Limited in Jakarta on Friday evening to buy part of the latter?s shares in Encore International Limited Ltd, which owns 50.7 percent stake in Medco Energi.

Encore International is owned by Indonesian tycoon Arifin Panigoro.

The state oil and gas company said that the two companies had also agreed to further discuss the details of the transaction in the so called Exclusivity Period. ?The transaction will not affect the status of the share ownership in Medco Energi,? the company said.

The agreement ended a speculation that Pertamina would take over all of Arifin?s ownership in Encore in a transaction deal which would be worth about Rp 6.5 trillion in order to be able to become a majority shareholder in Medco Energi.

Medco Energi was the first Indonesian company to operate in the oil and gas sector and has been listed on Jakarta Stock Exchange since 1994. It has transformed itself from locally-focused company to an energy company operating throughout Indonesia and overseas, as well, with focus on oil and gas, power generation and renewable fuels.

According to the company?s 2009 financial report, Arifin?s Encore, which owns a 42.41 percent stake, is the single majority shareholder in Medco. The public holds a 40.8 percent stake . (kanti)