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Medco acquires Lundin's Indonesian assets
Publicly listed oil and gas company PT Medco Energi Internasional (Medco) is acquiring the Indonesian assets of Swedenâs Lundin Petroleum AB in a US$22 million cash deal
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ublicly listed oil and gas company PT Medco Energi Internasional (Medco) is acquiring the Indonesian assets of Sweden's Lundin Petroleum AB in a US$22 million cash deal.
Medco signed a sale and purchase agreement (SPA) with Lundin SEA Holding AB to acquire the Indonesian operations of Lundin Indonesia Holding BV on Thursday.
'This acquisition is in line with the company's goal to maximize production of the Singa gas field at the Lematang block and will contribute to Medco's total gas production by 42 million standard cubic feet per day [mmscfd] in 2015,' Medco president director Lukman Mahfoedz said on Saturday.
The Indonesian assets include a non-operating interest in the Lematang block and operating interests in the South Sokang and Cendrawasih VII blocks, as well as the joint study agreement (JSA) with respect to the Cendrawasih VIII block.
The Lematang block, which currently produces around 39 mmscfd, has been operated by Medco, partnering with Lundin Indonesia and Lematang E&P. Medco owns 51.11 percent of the shares, while the remaining participating interest of 23 percent is owned by Lematang E&P and 25.88 percent by Lundin Indonesia.
Lundin Petroleum, an independent oil and gas exploration and production company active in Europe and Southeast Asia, revealed in its press release that the selling of the assets is for an aggregate cash consideration of $22 million.
Lundin Petroleum may also become entitled to certain contingent payments and has an option to receive a future interest in the Cendrawasih blocks, the release reads.
'We are pleased with the sale of our assets in Indonesia, with net reserves of 0.9 million barrels of oil equivalents. We remain committed to our growth strategy in Southeast Asia, where Malaysia continues to be one of Lundin Petroleum's core areas,' Alex Schneiter, President and CEO of Lundin Petroleum, commented.
Lundin Petroleum holds a 100 percent participating interest in the Cendrawasih VII PSC block, a 100 percent participating interest in the Cendrawasih VIII joint study agreement and a 60 percent participating interest in the South Sokang PSC block.
Lukman of Medco said that although the two companies had signed the sale and purchase agreement, the completion of the transaction was subject to various conditions, including approval from the Indonesian government.
He hoped that the government, in this case, the Energy and Mineral Resources Ministry and the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), would soon issue their approval.
'We are expecting that the government's endorsement for this transaction would be given within a short time, since MedcoEnergi is the operator of this block. We will continue to supply gas to state electricity firm PT PLN at a decent price,' Lukman said. (rbk)
