Release: MedcoEnergi: Signs 5 GSAs and a PSC of Nunukan block

SIGNS 5 GAS SALES AGREEMENTS AND A PRODUCTION SHARING CONTRACT OF NUNUKAN BLOCK

Jakarta, December 13, 2004

Signing Gas Sales Agreements
On Sunday, December 12, 2004, PT Medco Energi Internasional Tbk. (?MedcoEnergi?/the ?Company?), as the leading energy company, through its wholly owned subsidiaries, PT. MEDCO E&P Indonesia (?MEDCO E&P?), signed 3 Amendment to the Gas Sales Agreements and 2 Head Of Gas Sales Agreements with details below:

1. Amendment to Gas Sales Agreement between MEDCO E&P and Pertamina to supply gas to PT Pupuk Sriwijaya, Palembang, at 45 MMCFD (Million Cubic Feet per Day) from 2004 to 2007. Priced at USD 1.5/MMBTU (Million British Thermal Unit).

2. Amendment to Gas Sales Agreement between MEDCO E&P and PT Perusahaan Listrik Negara (?PLN?) to supply additional 9 MMCFD of gas to Gas Power Plant Simpang Tiga Indralaya, South Sumatra (the total volume of gas supplied increase to 19 MMCFD from 2004 to 2012. Priced at USD 2.685/MMBTU.

3. Amendment to Gas Sales Agreement between MEDCO E&P and PLN to supply additional 12 MMCFD of gas to Gas Power Plant Borang, Palembang, South Sumatra, (the total volume of gas supplied increase to 25 MMCFD) for 2005 to 2013. Priced at USD 2.55/MMBTU.

4. Head of Agreement for gas sales commitment between MEDCO E&P and the Joint Venture of PT Meta Epsi and PT Pembangkitan Jawa Bali to supply gas to Gas Power Plant Gunung Megang, South Sumatra, at 14.7 MMCFD from 2006 to 2013. Priced at USD 2.45/MMBTU.

4. Head of Agreement for gas sales commitment between MEDCO E&P and PLN to supply gas to Gas Power Plant Keramasan, Palembang, South Sumatra, at 13.3 MMCFD from 2009 to 2013. Priced at USD 2.7/MMBTU.

A total of 94 MMCFD gas sales from the Company?s gas fields in South & Central Sumatra block, which is operated by MEDCO E&P, reflected MedcoEnergi?s efforts in commercializing the Company?s significant stranded gas reserves. The Management believes that additional gas sales would contribute to the increase of the Company?s revenues.

Going forward, MedcoEnergi will continue in securing more gas sales contracts, in addition to bigger projects such as monetizing the Company?s huge gas reserves in Sulawesi.

Production Sharing Contract of Nunukan Block
On the same event, the Company, through its wholly owned subsidiary, PT. MEDCO E&P Nunukan (?MEDCO E&P Nunukan?), also signed a Production Sharing Contrat of Nunukan Block (?Nunukan PSC?), which is located offshore East Kalimantan (see location map), with BPMIGAS. The contract term of the PSC is 30 years from Effective Date (including maximum initial 6 years and 4 years extension for exploration activities). For the first 6 years of exploration period, the Company commits to spend around USD 15.7 million.

The Nunukan blok covers 4,917 square kilometers of offshore Bunyu ? Tarakan islands, within the Tarakan geological basin.

The Company has been awarded as the winner of the Nunukan Block?s tender, which was held by Directorate General of Oil and Gas, on October 21, 2004. The Company?s participation in the tender for acquiring new working area is a reflection of the Company?s strategy to add its oil and gas reserves. (end of release)