April 5, 2010 / 11:46 AM / 9 years ago

Indonesia's Medco says to operate Libya oil block

JAKARTA (Reuters) - Indonesian energy firm PT Medco Energi International Tbk has become the operator of the Area 47 oil block in Libya, replacing Canadian energy firm Verenex , it said on Monday.

Medco has said previously it plans to invest $1.7 billion between 2010-2014 in several major projects, including oil developments in Libya.

Medco Energi’s Area 47 project in Libya is expected to produce between 50,000-100,000 barrels per day (bpd) of crude oil and is due to start production in 2014.

In December last year, shareholders of Verenex Energy Inc overwhelming approved the C$317 million sale of the small Canadian oil explorer to a Libyan sovereign wealth fund, ending an international takeover battle that saw Libya block a richer offer from China.

The statement said Medco was in the final stages of seeking a declaration of commerciality from the Libyan government for numerous discoveries made in Area 47.

“Currently, we are also in the process of mobilising a drilling rig to complete the drilling of two further appraisal wells and three exploration wells as part of the work programme in 2010,” Medco said in a statement.

Medco said drilling this year would also include the completion and testing of three previously drilled wells, which had been suspended.

Medco booked a net profit of $19.2 million in 2009, down 93.1 percent from $280.2 million in 2008. It said the drop was due to lower oil prices while crude oil production fell to 35,000 barrels per day (bpd) in 2009, from 45,000 bpd in 2008.

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