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Medco seeks $275m in loans to finance oil field in Libya
Publicly listed PT Medco Energi International is seeking as much as US$275 million worth of loans to develop its oil block in Libya
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Publicly listed PT Medco Energi International is seeking as much as US$275 million worth of loans to develop its oil block in Libya.
Medco project director Lukman Mahfoedz said the so-called Area 47 project in Libya would cost $800 million for facility construction and $300 million for development.
“Of the total cost of US$ 1.1 billion, Medco will only contribute 25 percent,” he said.
Medco president director Darmoyo Doyoatmojo said he was optimistic the company would secure the required loans.
“Once a reserve has been found, the project’s risk will be very small,” he said, adding Medco had talked with several banks about loans.
Area 47 is estimated to have contingent reserves of 307 million barrels of oil. Under the production sharing agreement, Medco and partner Canada-based Verenex jointly own 13.7 percent of the reserve, while Libya’s National Oil Company owns the remaining 86.3 percent once the block starts production.
Verenex is currently trying to sell its stake in the block, with Indonesian state-owned oil and gas company PT Pertamina reportedly looking to acquire the stake.
Darmoyo said Medco expected Area 47 to begin production by the end of 2010, with an average output of 50,000 barrels oil per day (bpd).
“We’ve submitted our appraisal reports on the project’s economic viability to Libya’s National Oil Company, and we expect to receive its approval in the third quarter,” he said.
Medco, controlled by the Panigoro family, recorded $280 million in net profit last year, up from $7 million in 2007.
