Medco Signs MoU with Libya over Area 47 Block
Oil and gas company PT Medco Energi Internasional Tbk, found by businessman Arifin Panigoro, said its wholly owned unit Medco International Ventures (MIV) has signed a memorandum of understanding with Libya Investment Authority (LIA) over the development of lucrative onshore Area 47 oil and gas block in Libya.
LIA, a sovereign wealth funds of Libya, is a new partner of Medco in developing the Area 47 block. On December 21, 2009, LIA has finalized the acquisition of 100% shares in Verenex Energy Inc. (verenex), a listed oil and gas and company in Canada, which holds 100% shares in Verenex Energy Area 47 Ltd (VEAL). VEAL is the partner of Medco International, which holds 50% interest in the Area 47 and also the operator of the block.
Under the MoU, both parties agreed that the operator of the Area 47 block will still be in the hands of VEAL, which is now a subsidiary of LIA, while Medco International Ventures will be responsible to provide services and support on technical and operational aspects to Verenex Energy.
MIV is fully owned by Medco Energi Global Pte Ltd, a sub-holding which is also a wholly owned subsidiary of Medco Energi. MIV holds 50% interest in the oil and gas exploration block, in area 47, located in Ghadames Basin, Libya.
Medco Energi said that both LIA and MIV will cooperate to secure approval on Working Program and Budget for 2010 from the Lybian government as well as securing extension of exploration extension and the re-implementing drilling program in the Area 47.
Medco Energi and Verenex won the rights to develop the block for 30 years in 2005. Under the deal with the Libyan government, Medco and the Libyan sovereign wealth fund will receive 13.7 percent of revenue and the Libyan government 86.3 percent. The block, which is believed to contain about 2.15 billion barrels of oil equivalent, is expected to begin production in 2013-2014. (Roffie Kurniawan)