I

ndonesia’s largest private oil and gas company, PT Medco Energi Internasional (MEI), said on Tuesday that it would resume operations at an oil block called Area-47 in Libya next month.

MEI president director, Lukman Mahfoedz, told reporters that currently, the company had reopened its office in Tripoli, the country’s capital, and was in the process of contacting subcontractors to start the development of production facilities at the area.

“Our office in Libya has been opened. As many as 60 staffers have started working there. But, in the field [Area 47], we still have to call subcontractors first,” he reported on the sidelines of the Asia Pacific Oil & Gas Conference and Exhibition 2011 in Jakarta.

Despite delays due to the recent popular unrest in Libya, he insisted that there would be no need for the company to spend additional funds on the block.

Medco had completed the exploration phase in the block and was ready to build production facilities, Lukman said. He added the total investment required to develop the block was US$800 million that would be shared with the other shareholder, the Libyan Investment Authority (LIA).

Medco and LIA hold 50 percent shares respectively in the block which is located in the Ghadames Basin.

Lukman revealed that under the production sharing contract signed with the government of Libya, the government would provide 50 percent funds to run the projects in the block, while the remaining 50 percent would be shared between Medco and LIA.

“Under that condition, Medco will only pay 25 percent of the $800 million,” he said.

Previously, Medco, through its subsidiary, Medco International Venture Limited, teamed up with Canada-based Verenex Energy to develop the block with Verenex appointed as the operator but in December 2009, LIA acquired Verenex’s participating interest in the block.

LIA is a wealth fund management company established by the Libyan Government in 2006 to help manage the country’s surplus oil revenues.

Following the acquisition of Verenex’s interest in the block, Medco was appointed as the block operator for exploration activity starting in April 1, 2010.

As the operator of the field, Medco expects to produce 50,000 barrels of oil per day (bpd) starting 2014 or early 2015.

—JP/Rangga D. Fadillah