Release: MedcoEnergi: Extension of PSCs

(29 October, 2010)--PT Medco Energi Internasional Tbk, would like you to inform you that on October 28, 2010, MedcoEnergi through its subsidiaries, have signed the Extension to the Production Sharing Contracts for the following oil and gas Working Areas:

1. South & Central Sumatra PSC (S&CS)
The extension of S&CS PSC was signed by the Company?s wholly owned subsidiary, PT Medco E&P Indonesia (Medco Indonesia) with BPMIGAS and has been approved by the Government of Republic of Indonesia.

MedcoEnergi, through Medco Indonesia, holds 100% participating interests and the operator of the block. The average daily production of oil and gas from S&CS for the first 9 months of 2010 are 8.0 thousand barrel of oil per day (mbopd) and 125.72 million cubic feet per day of gas (mmscfd).

2. Block A PSC
The extension of block A PSC was signed by the Company?s wholly owned subsidiary, PT Medco E&P Malaka (Medco Malaka) and its partners, Japan Block A, Ltd. (Japex) and Premier Oil Sumatra (North) BV (Premier), with the Upstream Oil and Gas Supervisory Agency (BPMIGAS). In addition to the approval of he Government of Republic of Indonesia, the extension of Block A PSC also has been agreed by the Government of Aceh as stipulated in the Law No. 11, 2006 regarding the Government of Aceh.

MedcoEnergi, through Medco Malaka, holds 41.6667% participating interests of Block A PSC, while the remaining 41.6666% and 16.6667% participating Interests are held by Premier and Japex, respectively. Medco Malaka remains as the operator of the working area.

In addition to the extension of Block A PSC, MedcoEnergi and its partners also signed Statement of Acknowledgement (Acknowledgement) with the Government of Aceh. The Acknowledgement stipulated that all the participating interest holders of Block A Working Area must provide budget for Community Development in surrounding area of Block A at the minimum amount of 1% (one percent), aside from the PSC mechanism.

The extension of Block A PSC will enable MedcoEnergi to begin with the development of gas reserves in Block A so that we could fulfill the industry needs, especially in Aceh. Additionally, the development of gas reserves in Block A would also provide employment opportunity to the Aceh people, especially to the competent work force which meet the operation requirements.

3. Bawean PSC
The extension of Bawean PSC was signed by the Company?s subsidiary, Camar Bawean Petroleum Ltd (CBPL), and its affiliated company, Camar Resources Canada Inc (Camar Resources), with BPMIGAS, and has been approved by the Government of Republic of Indonesia

MedcoEnergi, through CBPL, holds 65% participating interests of Bawean PSC, meanwhile the remaining 35% working interest is held by Camar Resources, which is also the operator of the block The average daily productions of oil form Bawean working area for the first 9 months of 2010 is 630 barrels of oil per day (bopd). Bawean working area is located at offshore East Java

Financial Impact
The signing of extension of PSCs for S&CS, Block A and Bawean Working Areas have provided greater assurance to MedcoEnergi?s business sustainability in the future.

MedcoEnergi appreciates the trust end opportunities given by the Government of Indonesia in continuing the operation of oil and gas working areas in Indonesia and the ability to contribute in meeting the Indonesian?s oil and gas needs. (ends)