Medco Group
Group Medco started business as an onshore oil and gas drilling contractor. Meta Epsi Pribumi Drilling Co. (Medco) was established by Arifin Panigoro in 1980. Currently Medco has 14 oil and gas blocks and 16 offshore rigs in Sumatra, Kalimantan, Sulawesi, Java and Papua. Medco also has oil fields abroad such as in America, Australia, the Netherlands and Middle East.
The surge in the oil prices boosted Medco and became more aggressive in expanding business in the oil sector. Late January, 2007, Medco found new oil field in Oman with a production capacity of 18,000 barrels a day. Medco plans to expand its production capacity from oil field in Libya to start producing by the end of 2007.
By the end of 2006, Medco acquired Novus, an oil company in the United States having a production capacity of 20 million cubic feet of gas and 500 barrels of oil a day.The Medco Group's total production capacity now is 60,000 barrels of crude oil and 150 million cubic feet of gas a day in the country.
Recently the Medco Group through PT. Medco Power agreed to team up with PLN to build a 100 megawatt gas fired power plant (PLTG) 100 in Nanggroe Aceh Darussalam (NAD) with an investment of US$ 100 million or around Rp 900 billion. The PLTG will have gas supply from the A Block to be developed by PT Medco E&P, another subsidiary, at an estimated cost of US$ 600 million. The A Block in Lhokseumawe, construction of which to start next year is expected to produce gas only in 2010.
The Medco Group also plans to build an ethanol factory to produce cassava based biofuel. The company will grow cassava over hundreds of hectares of land in Kota Bumi, North Lampung with an investment of US$ 34.13 million. The factory will produce 180 kiloliters of ethanol a day. Medco will cooperate with local farmers to guarantee supply of basic material. The factory to start operation by the end of 2007.
Demand for biofuel is growing and the prospect is encouraging for business in biofuel. In the United States, transport oil fuel is required to have a 5% content of biofuel. In Brazil the required content is 20%.
Recently Medco offered to sell its 51.3% stake in oil drilling subsidiary PT Apexindo Pratama Duta Tbk Medco has named Credit Suisse as its financial advisor in the planned divestment. It said it wants to use the fund from the share sale to finance business expansion in the upstream sector of oil and gas sector.
