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Govt approves revising Medco’s Corridor PSC to cost recovery scheme
MedcoEnergi, the country's second-largest gas producer in 2022, has obtained the ministry's approval to revert its Corridor Block PSC to a cost recovery scheme, according to a statement released on Thursday.
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Technicians install a component at a gas pressure reduction station in East Java belonging to Ophir Indonesia (Sampang) Pty. Ltd., in this undated file photo. The London-listed energy company was acquired in May 2019 by PT Medco Energi Internasional. (Courtesy of/SKK Migas)
T
he Energy and Mineral Resources Ministry has approved a request from PT Medco Energi Internasional (MedcoEnergi) to revise its production sharing contract (PSC) for the gas-rich Corridor Block in South Sumatra.
The ministry’s approval allows the PSC to be changed from a gross split scheme back to a cost recovery scheme, with “better requirements” to ensure the economics of new development and exploration projects in the Corridor Block, says a statement issued by the company on Thursday.
“This agreement is a significant step forward in ensuring a stable and sustainable future of the Corridor Block, providing great benefits to the nation, partners and stakeholders,” Ronald Gunawan, president director of subsidiary Medco E&P, said in the statement.
Read also: Oil and gas giants mulling switch to cost recovery scheme
Under the revised contract, the block has an energy output of around 700 billion British thermal units per day (BBtud), of which 83 percent is sold to domestic buyers and 17 percent exported to Singapore.
The Corridor Block produced 770 million metric standard cubic feet per day (mmscfd) and 6,200 barrels of oil per day (bopd) in 2022, according to data from its operator Medco E&P Grissik Ltd., making it the second-largest contributor to Indonesia’s gas lifting capacity last year.
The ministry also approved allocations and prices for three buyers, including state-owned gas distributor PT Perusahaan Gas Negara Tbk (PGN), according to the statement. MedcoEnergi did not provide any other details, only adding that the sales and purchase agreement for the gas would be signed shortly.
