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il and gas company PT Medco Energi Internasional is seeking to build partnerships with other companies to further strengthen its renewable energy business in areas such as the production of ethanol.

Medco president director Lukman Mahfoedz said that the company had established strategic partnerships in its non-oil and gas business area with companies such as Saratoga Capital, which agreed to jointly run PT Medco Power Indonesia.

“We are seeking partners for PT Medco Ethanol Lampung, an ethanol producer under PT Medco Downstream Indonesia,” Lukman said over the weekend. “We are trying to complete the partnership [deal] within one or two months,” Lukman added.

Late last year, Medco reached agreement with Saratoga Capital to establish a partnership in running Medco Power Indonesia. Medco sold a 51 percent stake in Medco Power Indonesia to Saratoga’s PT Saratoga Power in a deal worth US$112 million.

Lukman said that the company would maintain its focus on oil and gas exploration and production, both domestically and overseas.

“Even though we have deconsolidated our power generation business and booked a conservative impairment test of assets, Medco is still capable of showing a strong operation performance, particularly in the oil and gas business units,” he said.

The company’s total revenues reached $554.3 million in the first half of the year, 5.5 percent lower than the $586.4 million in the same period last year. The company said that the lower total revenue was because the company no longer consolidated revenue from the power generation business.

Medco reported an increase in its average oil selling price, which reached $120.77 per barrel in the first semester of the year, about a 7 percent increase from $113.08 per barrel in the same period last year.

The company booked $127.8 million in operating income in the first semester of the year, 13.34
percent higher compared to $111.6 million in the same period last year. However, the implementation of new accounting standards dropped the company’s net profit to $3.4 million in the first six months of the year from $8 million in the same period last year.

“The company’s financial position at this point remains robust. With sufficient cash on hand, we will be able to meet our financial commitments for major project developments and exploration programs in this year and years to come,” Medco finance director Syamsurizal Munaf said in a written statement.

Medco held $733.4 million in cash and cash equivalent at the end of the first semester, more than double the $363.1 million it held in the same period last year, particularly due to the recent issuance of rupiah bonds and drawdowns from standby loans.

Besides the exploration and production business, Medco also started to enjoy contributions from its coal mining business. The company, through its subsidiary PT Medco Energi Mining Internasional, owns two coal producers, PT Duta Tambang Sumber Alam and PT Duta Tambang Rekayasa, which hold concessions in Nunukan, East Kalimantan.

Lukman said that Medco Energi Mining shipped 35,000 tons of coal to China last week. The company is expecting to deliver 150,000 tons by year’s end. Shares in Medco (MEDC) were unchanged at Rp 1,710 (18 US cents) on Friday. The shares have dropped 28.75 percent on a year-to-date basis.