Indonesia's Pertamina to Buy Medco

State oil and gas company PT Pertamina will in no time own 27.9 percent shares of PT Medco Energi Internasional Tbk as principles of agreement between Pertamina and Encore Internationa Limited (EIL) on the acquisition of Encore Energy Pte Ltd (EEPL) has been signed.

Encore Energy Pte Ltd controls 50.7 percent shares of Medco Energi Internasional.

Pertamina Vice President of Corporate Communications, Mochammad Harun, said the planned corporate act is an attempt to achieve oil and gas production by 2015 at one million barrels per oil equivalent per day.

The deal is expected of strengthening the business development strategy of both companies through a synergy between Pertamina and Medco Energi.

According to Deni Hamzah, capital market analyst, Pertamina is aiming at Medco's oil reserve and plentiful drilling concessions.

"It will be probably more into income diversification for Pertamina as well as an attempt of making possible oil exports," Deni told VIVAnews in Jakarta today, Oct 18.

Therefore, he went on to say, Pertamina will let go of its subsidiaries for a more focused business development. "The joining of Pertamina and Medco will enable a transfer of technology and revenues," said Deni.

In addition, Teguh Rahmadani, Director of PT Evio Securities, said Pertamina's intention to join Medco is a step of securing its oil supply.

Medco is also considered a promising domestic oil and gas companies, regarding especially with oil and gas fields.

Medco owns PT Medco E&P Indonesia (MEPI), PT Medco Energi Global Pte Ltd, Singapore, PT Medco E&P Rimau Indonesia (MEPR), Medco CB Finance BV, Holland, and Medco Straits Services Pte Ltd, Singapore, as its subsidiaries.

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