Medco Energi signs US$90 million agreement for Yemen block

Medco Oil agreement YemenHaving signed a contract worth US$90mn, Medco Energi will obtain a 21.25 per cent interest in Block 9 onshore Yemen. (Image source: Calvalley Petroleum)Indonesian oil and gas firm Medco Energi is set to acquire a 21.25 per cent working interest in Block 9 onshore Yemen, after signing an agreement worth US$90mn with Reliance Exploration and Production DMCC

The Sale and Purchase Agreement, completion of which relies on approval from Yemen’s Ministry of Oil and Minerals, dictates that Medco’s wholly-owned subsidiary Medco Yemen Malik will gain a participating interest in the 2,234 sq km block.

Located in the Sayun-Masila Basin in the republic’s Hadramaut province, Block 9 has estimated gross 2P oil reserves of approximately 58.6 mmbbl and is expected to generate up to 14.5 mbl per day.

Medco president director and CEO, Lukman Mahfoedz, said, “This acquisition is in accordance with the company’s strategy to strengthen portfolio of producing assets.

“After acquiring two exploration blocks in 2009, this acquisition has set up another stepping stone for the company for its bigger growth agenda in MENA countries in general, and particularly in Yemen.”

Upon completion of the contract, Medco will share operations with Calvalley Petroleum, who, with a 42.5 per cent interest, lead Block 9 operations, as well as Hood Oil and Yemen Oil and Gas Corp, who own 21.25 per cent 15 per cent interest respectively.

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