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India-based oil company Aban Offshore, previously known as
Aban Loyd Chiles Offshore Ltd., has broken off negotiations for the
purchase of a majority stake in local oil drilling firm PT Apexindo
Pratama Duta Tbk.
In a letter to the Capital Market and Financial Institutions
Supervisory Agency (Bapepam-LK), Aban financial director C.P.
Gopalkrishman confirmed that his company had pulled out of talks to
acquire PT Medco International Tbk.'s 51.57 percent stake, PT Asian
Opportunities' 15.92 percent stake and CLSA Ltd's 15.92 percent stake
in Apexindo.
In the middle of last year, Medco, the biggest publicly traded oil
company in Indonesia, announced a plan to sell its entire stake in
Apexindo as Medco was looking to expand its existing oil and gas
fields, and acquire more oil fields overseas.
The company confirmed that it had received an offer from Aban some time
last year, and then announced in August that it had refused the offer.
"As a public company, we are used to receiving offers from investors,
but Medco is not the one who has been active in selling Apexindo,"
Medco corporate secretary Andy Karamoy told The Jakartapost Wednesday.
Despite the failure of the negotiations, Medco went ahead with its plan
to expand its upstream oil and gas operations by buying part of
ConocoPhillips's interest in the Block A gas field in the country's
northernmost province, Nanggroe Aceh Darussalam, this month.
With this purchase, Medco and its partner Premier Oil Plc. now each
have a half share of ConocoPhillips' 50 percent stake in the gas block.
The Jakarta-based Medco will pay US$36 million for the 25 percent
interest in the gas block.
Block A is approximately 45 kilometers east of the Arun field, and is
operated by Exxon, which supplies gas to the Arun liquefied natural gas
plant in Aceh.
The Indonesian government is keen to have the field pumping gas as soon
as possible to start supplying two fertilizer plants in Aceh that have
had to halt production due to a lack of gas.
Medco, Japan Petroleum Exploration Co. and Premier Oil have equal
shares of the remaining 50 percent they acquired from Exxon Mobil Corp.
in April last year, Bloomberg reports.
With the additional stake it bought from ConocoPhillips, Medco now has
a total interest in Block A of 41.67 percent, while Premier Oil has a
41.66 percent stake and Japan Petroleum a 16.67 percent stake. Block A
covers some 3,910 square kilometers.
The Block A field is estimated to hold about 650 billion cubic feet of
gas, Premier Oil said in a statement on April 26.
ConocoPhilips has delayed developing Block A as the gas is expensive to
extract due to the fact that it contains a high level of carbon dioxide.
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