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Medco hikes capex 50% for 2022 to raise output
The company aims to increase oil and gas production by 63 percent to 155 mboepd next year.
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The Bualuang oil field in Thailand is operated by Medco Energi Internasional. (Handout/Medco Energi Internasional)
P
ublicly listed PT Medco Energi Internasional has decided to raise its annual capital expenditure (capex) by 51.2 percent to US$325 million next year to boost production.
The second-largest Indonesian oil and gas firm said on Monday that the 2022 capex comprised $275 million for its oil and gas business and $50 million for its power production business.
Medco’s decision to raise capex comes at the end of a year of rising global energy demand. The Brent crude oil benchmark was up 38 percent year-to-date at $71.52 per barrel on Tuesday afternoon, according to Bloomberg data.
“Commodity prices remain volatile, but still at a comfortable level, and domestic gas demand continues to recover after [COVID-19-induced] economic lockdowns,” said Medco CEO Roberto Lorato in a statement published Monday.
The company plans to use the oil and gas capex to develop, among other things, the offshore South Natuna Sea Block B, with the first gas expected from the Hiu Field in the second quarter of 2022, and the Belida extension project in the fourth quarter.
Medco aims to increase oil and gas production to 155 thousand barrels of oil equivalent per day next year from 94 to 95 mboepd this year.
To achieve the targeted higher production, the company is also banking on the Corridor Block recently acquired from ConocoPhillips.
