Release: PT Medco Energi Internasional Tbk: Signs service contract for the development of Karim fields

Jakarta, March 21,2006-PT Medco Energi Internasional Tbk(the ?Company?/?MedcoEnergi?) is pleased to announce that on Monday, March 20, 2006, its majority owned subsidiary, Medco LLC, signed a first-of-its-kind, Service Contract, to develop a cluster of 18 fields in the Nimr-Karim area of South Oman with Petroleum Development Oman L.L.C (?PDO?) and Participation and Economic Sharing Agreement with Oman Oil Company SAOC (?OOC?). This signing is made following to the winning tender announcement in January 2006 regarding a Service Contract to operate Karim field for 10 years period.

During the signing of the agreement, the Company was represented by the CEO, Mr. Hilmi Panigoro, and PDO was represented by John Malcolm, the company?s Managing Director. The ceremony was also attended by H.E. Mohammad bin Nasser al-Khusaibi, Secretary General of the Ministry of National Economy, Deputy Chairman of the Board of Directors of PDO, Mr. Alwi Shihab, Indonesian Presidential Envoy To Middle East, and other guests and dignitaries from both Omani and Indonesia Government.

The Karim Fields Service Contract will give MedcoEnergi a high degree of autonomy in the development of PDO?s Karim fields. The contract is a service agreement with clearly defined incentives for improved delivery of oil. Under the terms of the agreement, MedcoEnergi will develop the work programme and an annual budget for the financing of that programme. PDO, however, retains full accountability for what happens in its concession area and will review and approve the work programme and annual budget.

At the ceremony Mr Hilmi Panigoro said that he ?looked forward to working hand in hand with PDO and OOC?, and that the signing of the contract as ?an excellent opportunity for MedcoEnergi to expand its presence in the Middle East Oil and Gas market.? ?Bringing in a wealth of experience and technical know-how, we are certain that we can add value and deliver excellent results for the fields at hand.?

Mr Malcolm welcomed the opportunity to work with MedcoEnergi and OOC. He said: ?Through such innovative ways of working with our contractors, we can ensure that we wisely allocate PDO?s resources on field-development projects for the short, medium and long term.? (end of release)