Press Release: Signing of Gas Sales Agreements with PLN

Following is a press release from PT Medco Energi International:

August 6, 2003 - PT Medco Energi Internasional Tbk. (Medco) continue to actively support the nation?s energy policy, by adding new gas sale projects to PT PLN?s (PLN, the state-owned power company) gas power plants. In addition, gas to power utilization for Java-Bali is continuously being appraised.

This is in line with the gas utilization MoU signed between Medco (through PT Exspan Nusantara) and PLN on February 20, 2003. One of the realizations of the above MoU is from the signing of Gas Sales Agreements (GSA) for PLTG Kaji, PLTG Borang and PLTGU Tanjung Batu, on Saturday July 19, 2003. And previously in December 2002, PLTG Gunung Belah and PLTG Simpang Indralaya.

In accordance with May 2003 agreement, Medco had increased gas supply to PLTGU Tanjung Batu, East Kalimantan, to 15 MMCFD (Million Cubic Feet per Day) from previously 10 MMCFD, from North Kutai Lama (NKL) field.

Starting February 2004, Medco will supply gas to PLTG Borang, Palembang, South Sumatra, with the amount of 12 MMCFD from oil and gas fields in South Sumatra.

Meanwhile, Kaji GSA at Musi Banyuasin, South Sumtra, with contract term of 10 years will be realized starting October 2003 with gas supply of 10 MMCFD by using associated gas from Kaji- Semoga oil field.

Gas Sales Agreement with PLN
1. PLTG Gunung Belah ? Tarakan, East Kalimantan
Gas Volume ~10 BCF (2002-2012)
Gas Price Rp 12,000 - US$ 1.88 - US$ 2.10/MMBTU
Value US$ 20 million

2. PLTG Simpang Tiga Indralaya ? South Sumatra
Gas Volume ~32 BCF (2002-2013)
Gas Price US$ 2.3/MMBTU
Value US$ 76 million

3. PLTGU Tanjung Batu ? Kutai Kartanegara, East Kalimantan
Gas Volume ~50 BCF (1998-2009)
Gas Price US$ 2.5/MMBTU
Value US$ 125 million

4. PLTG Kaji ? Musi Banyuasin ? South Sumatra
Gas Volume ~25 BCF (2003-2013)
Gas Price US$ 1.15/MMBTU
Value US$ 30 million

Head of Agreement with PLN
1. PLTG Borang ? Palembang, South Sumatra
Gas Volume ~44 BCF (2004-2013)
Gas Price US$ 2.42 ? 2.55/MMBTU
Value US$ 110 million

In addition to the above, Medco is committed to provide solutions to the Java-Bali power crisis, which currently, the Company, is already in talks with related installations/companies; BPMIGAS, Pertamina, PGN and PLN. (end of release)