Release: Medco: The Signing of Donggi-Senoro LNG Development Cooperation Agreement

(Jakarta, August 20, 2007) PT Medco Energi Internasional Tbk is pleased to report that MedcoEnergi, PT Pertamina (Persero) and Mitsubishi Corporation have entered into a Donggi-Senoro Development Cooperation Agreement (?Agreement?) today, August 20, 2007 to establish a project company to be owned by all parties for the implementation of LNG project.

Pursuant to the Agreement, the Parties also agreed to develop and enter into various contracts, including a Gas Sales Agreement , Shareholders Agreement and LNG Sale and Purchase Agreements with LNG purchasers, prior to taking the Final Investment Decision which is targeted in early first quarter of 2008.

The President of Republic of Indonesia, Dr. Susilo Bambang Yudhoyono and the Japan?s Prime Minister, Mr. Shinzo Abe, in his current trip to Indonesia, inaugurated the signing of Agreement.

The LNG Project will be structured as downstream project. The LNG project plans to utilize gas reserves from the Senoro Field in Senoro Block and from the Donggi, Matindok, Maleo-Raja and Minahaki Fields in Matindok Block. Senoro-Toili Block is situated in the Banggai District, Central Sulawesi, and is operated under a Joint Operating Body Production Sharing Contract between PT Pertamina EP (50%) and PT Medco E&P Tomori Sulawesi (50%) (altogether called ?Pertamina-Medco Tomori JOB?). While Matindok Block is operated by PT Pertamina E&P and is situated close to the Senoro?Toili Block.

The Project Company will purchase clean natural gas from upstream gas suppliers, and liquefy the natural gas into LNG, sell the LNG and deliver it to buyers. The LNG plant is anticipated to have a production capacity of approximately 2 million tons per year, subject to further design and engineering work. (end of edited release)