Friday, June 14, 2024

Medco Energi divests stake in Libya’s Area 47 to National Oil Corporation

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PT Medco Energi Internasional has announced the divestment of its stake in the oil and gas field Area 47 in Libya to the Libya National Oil Corporation (NOC). This divestment follows an agreement between MedcoEnergi and NOC to transfer MedcoEnergi’s entire 50 percent participating interest in the Exploration and Production Sharing Agreement (EPSA) for Contract Area 47.

Additionally, MedcoEnergi sold its entire 24.5 percent shareholding in the Joint Operating Company, Nafusah Oil Operations B.V. This divestment also resolves all claims and disputes under arbitration between MedcoEnergi and NOC, which both parties have agreed to withdraw.

“This divestment aligns with MedcoEnergi’s strategy to continually optimize its portfolio through targeted acquisitions and divestitures. We appreciate NOC’s cooperation during this transaction,” MedcoEnergi CEO Roberto Lorato said in a media statement on Tuesday, May 28, 2024.

Area 47, discovered in 2007, is a conventional oil development area in Libya operated by Nafusah Oil Operations, covering 6,182 square kilometers. According to Medco’s official website, the company is a joint venture between Medco International Ventures Limited (MIVL) as the operator and the Libyan Investment Authority, each holding a 50 percent stake.

For participation or development rights, Medco International Ventures Limited holds 25 percent, the Libyan Investment Authority 25 percent, and the National Oil Corporation (NOC) Libya 50 percent.

In March 2013, MedcoEnergi announced the formation of a Joint Operating Company (JOC) with its partners, the National Oil Corporation of Libya and the Libyan Investment Authority, to act as the operator in the development stage of Area 47.

In 2013, Medco stated that the total capital investment required was estimated at around US$900 million, consisting of US$280 million for drilling and US$620 million for surface facilities. MedcoEnergi’s share of this investment was approximately US$220 million.

Lukman Mahfoedz, President Director & CEO of MedcoEnergi, expressed great enthusiasm for this achievement as a follow-up to the Commercial Declaration in December 2011.

Lukman highlighted that the development of Area 47 represents a significant milestone for Libya’s oil production from new field developments and contributes significantly to both national and company revenues.

“We are very excited because 10 other discovered fields are currently under evaluation for the next development phase,” Lukman said back then in 2013.

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