Release: MedcoEnergi: Clears the disruption at Merbau field (Lirik)

Thursday, March 17 2005 - 01:24 PM WIB

Jakarta, March 17, 2005 ? PT Medco Energi Internasional Tbk. (?MedcoEnergi?/?the Company?) reported that on Tuesday, March 15th, 2005, a group of people that called themselves Defender of the People Forum (Forum Pembela Rakyat) forcefully closed down the Merbau field. Merbau field is one of MedcoEnergi?s oil and gas field located at South Central Sumatra, operated by one of its subsidiaries, PT Medco E&P Indonesia (?Medco E&P Indonesia?).

FPR demanded Medco E&P Indonesia to:
1. Hand over the production field road, built by the Company, that connects Simpang Ukui with Kerumutan of +/- 31km to the local government or Pelalawan community.
2. Inquire the Company to hot-mix the road.

In order to deal with such demand, Medco E&P Indonesia along with BP Migas Sumatra official convened a dialogue with the FPR and it was resolved the followings:
1. Medco E&P Indonesia in principal could hand over the road to the local authority therefore the community could use that road. However, the hand over process of the government-owned road should be approved first by BPMIGAS and other related government body.
2. On the issue of hot-mixing the ~31 km road, Medco E&P Indonesia could not proceed with the above due to other developing plans and budgeting that would be carried out within the production facility that needed initial coordination with the local government and other officials.

The last dialogue between Medco E&P, BPMIGAS Sumatra representative, Pelalawan Local Government, and Defender of the People Forum has been convened on Wednesday March 16th 2005 on 12:00. The demonstrators finally reached to an agreement after few dialogues with the officials that Medco E&P Indonesia does not have the authority to hand over the road to local government/community as they wished for due to central government possession of this asset. The blockade finally ended on 14:00 local time and operation could be resumed on Merbau production field.

By resuming the operation of Merbau field on March 16, 2005 at 14:00 p.m, the Company could limit the loss of production. (end of release)

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