Hilmi said the facility required a total investment of $800 million, but Medco will team up with Libyan Investment Authority (LIA).
“[The investment] will be shared 50:50 with Libya,” Hilmi said. He added the project was awaiting approval from the Libyan government.
“We expect the construction can begin this March. The project can start contributing output within three years,” said Hilmi, adding that the facility may be able to produce up to 50,000 barrel per day.
Medco holds rights to develop oil reserves in Libya’s oil block Area 47. The block is estimated to have contingent reserves of 307 million barrels of oil. It’s not clear yet whether the planned facility is prepared for this block or for other purposes.
Medco, controlled by the Panigoro family, recorded $280 million in net profit in 2008, up from $7 million in 2007. The company’s 2009 financial performance is being audited. Hilmi estimated that the company’s revenue would drop by 50 percent in 2009.
The drop is caused by the fact that the company registered gains in 2008 from selling its stake in drilling service company PT Apexindo Pratama Duta.
Medco is currently waiting for government approval on two major gas projects. The first is the development of the Block A gas field in Aceh province. The field’s production sharing contract will expire by 2011 and Medco is waiting on the government’s decision to extend the contract. The government said the contract would be extended this month.
The second project is the Donggi Senoro LNG project in Central Sulawesi. Medco teamed up with state oil and gas company PT Pertamina and Japan’s Mitsubishi Corporation to do the project. This initially aimed at processing natural gas supplied from the Senoro and Matindok gas fields as LNG for export but these plans were affected by political pressures to limit exports.
