Medco Energi acquires ConocoPhillips’ Indonesia, Singapore subsidiaries
Indonesian national oil and gas company Medco Energi Internasional recently announced its successful acquisition of ConocoPhillips Indonesia (CIIL) and ConocoPhillips Singapore Operations (CSOP), subsidiaries of US oil and gas giant Conoco Phillips (COP), without disclosing any details about the prices paid.
CIIL is the operator of the South Natuna Sea Block B PSC with 40% participation rights and the operator of the West Natuna Transportation System, while CSOP operates an onshore receiving facility in Singapore.
“Through this acquisition, not only will Medco Energi obtain world-class integrated offshore oil and gas operations, but it will also strengthen its position as an independent energy and natural resources company in Indonesia,” Medco Energi president director Hilmi Panigoro said in a statement.
In addition to CIIL’s involvement, South Natuna Sea Block B is also operated by US oil producer Chevron and Japanese oil and gas explorer Inpex, which have controlling shares of 25% and 35%, respectively.
As of December 2015, South Natuna Sea Block B had three producing oilfields and 16 natural gas fields in various phases of development. Its average daily production in 2014 comprised 5,000 barrels of crude and 117 million cubic feet of gas.
Medco Energi Internasional CEO Roberto Lorato said in September that the acquisition of the block would add to the company’s substantial gas and liquids reserves and increase its daily production by more than 35%.
In 2015, it produced a total of 60.4 billion cubic feet of gas, an increase of 2.65% on an annual basis. At the same time, it produced a total of 8.8 million barrels of oil, down around 2% year-on-year.
Taking advantage of the reduced value of oil and gas assets worldwide and discounted acquisition costs brought on by low global oil prices, Medco Energi has also completed a number of acquisitions with other companies.
Just earlier this month, Medco Energi announced that it had officially acquired a 50% stake owned by Amman Mineral Investama (AMI), which controls an 82.2% stake of Newmont Nusa Tenggara (NNT).
NNT currently operates the BatuHijau mine in Sumbawa in Indonesia, the country’s second-largest copper and gold mine, which produced about 240 million pounds of copper and 300,000 ounces of gold last year.
A week later, Medco Energi stated that it had reached an agreement to acquire a 26.67% stake in the Block A gas field in Aceh, Indonesia from its current partner Kris Energy.
Once the transfer of the participating interests has been agreed upon by the central government and the regional administration, Medco Energi’s operating interest in the gas field will increase to 85%, while the remaining 15% will be owned by KrisEnergy.
Back in July, Meta Adhya Tirta Umbulan, a joint venture between Medco Energi’s Medco Gas Indonesia and private construction firm Bangun Cipta Kontraktor, signed a working contract with the East Java provincial administration for the construction of the Umbulan water supply system worth Rp2 trillion (US$149.16 million).
“By taking the Umbulan project, Medco Energi has started to diversify in a bid to find a more sustainable way to support its business in the long run, considering the volatility that will always haunt the oil and gas industry,” Reza Priyambada, a stock market analyst with the Indonesian Association of Securities Analysts (AAEI), said.