Release: MedcoEnergi signs GSAs & HOA for gas sales for S. Sumatra area

January 20, 2006 - PT Medco Energi Internasional Tbk (?MedcoEnergi?/the?Company?) is pleased to announce that on Friday January 20, 2005, its wholly owned subsidiaries, PT Medco E&P Indonesia (?Medco E&P Indonesia?) and PT. Medco E&P Lematang (?Medco E&P Lematang?), have signed two (2) Gas Sales Agreements (?GSA?) and Head of Agreement for Gas Sales (?HOA?). The followings are details of the two GSAs and HOA:

1. Gas Sales Agreement (?GSA?) between Medco E&P Indonesia and PT MetaEpsi Pejebe Power Generation (?MEPPO-GEN?)
Pursuant to the GSA, Medco E&P Indonesia will supply gas from Rambutan Field, South & Central Block (S&C) Sumatra to support Gunung Megang Gas-fueled Power Plant in Muara Enim Regency operated by MEPPO-GEN. Medco E&P Indonesia will supply the total volume of 30.07 Billion Cubic Feet (BCF) for the period of eight (8) years, starting in 2006 to 2013. The total value for this gas supply is USD 79.5 million.

2. GSA between Medco E&P Indonesia and PT PLN (Persero) (?PLN?)
Pursuant to the GSA, Medco E&P Indonesia will supply gas from several gas fields in S&C Block in South Sumatra PSC to Keramasan Gas-fueled Power Plant, Palembang. Medco E&P Indonesia will supply the total volume of 62.51 BCF for the period of seven (7) years, starting in 2007 to 2013. The total value for this gas supply is USD 197 million.

3. HOA between Medco E&P Lematang and PT Perusahaan Gas Negara (Persero), Tbk
Pursuant to the HOA, Medco E&P Lematang would supply gas from Singa Field in Lematang Block PSC in Muara Enim Regency to Gerbang Pengolahan Gas Pagardewa, South Sumatra. Medco E&P Lematang would supply 139 BCF starting early July 2008 up to early April 2017. The total value for the gas supply would be USD 351 million. The gas supply from Lematang Block PSC is expected to support the scarcity of gas in Java Island.

The signing of two GSAs and HOA has enable MedcoEnergi to increase its gas supply by 92.58 BCF with total value of USD 276.5 million from S&C Block PSC and 139 BCF with total value of USD 351 million from Lematang Block PSC.

This gas supply is expected to support the Government in solving the electricity shortage in South Sumatra area. in addition to that, it would enable the infrastructure preparation for future distribution of gas to Java.

The President Director of Medco E&P Indonesia, Lukman Mahfoedz, said ?This signing is in line with the strategy of our holding company, MedcoEnergi, to monetize its gas reserves.?

Hilmi Panigoro, MedcoEnergi?s Chief Executive Officer says ?We are proud that the National Companies always appoint us as the gas producer for their sustainable industry. This shows that MedcoEnergi is the energy company of choice by the National Companies.? (end of release)