Change Scheme To Cost Recovery, Medco Believes Gas Production Block Corridor Is Increasing

President Director of Medco Energi Hilmi Panigoro (left). (Photo: Doc. ANTARA)

JAKARTA - PT Medco Energi Internasional Tbk is confident that it can increase production in the Corridor Block if the government approves the change in Gross Split's oil and gas field development scheme to Cost Recovery.

With the change in the scheme, Medco can prepare a larger capital expenditure

Medco Energi President Director Hilmi Panigoro said the two schemes were not much different, but the government would pay for cost recovery.

"I think it's the same. After all, the cost recovery and gross split is just an option. It just means like this, if we cost recovery, it will cost the government," Hilmi told the media, Friday, October 13.

However, if Medco changes the development scheme to Cost Recovery, said Hilmi, Medco's potential to increase oil and gas production will increase. The reason is, the mod or Capex expenditure prepared by the company will be even greater.

"Yes, we must increase it, therefore with cost recovery we will do a bigger capex, thus allowing us to remind production," he added.

Hilmi said that his party is trying to minimize the level of production reduction or decline in the project and is being worked on in the Corridor Block.

Regarding the Corridor Block which is considered increasingly sovereign, he does not deny that it also affects oil and gas production but believes that Medco also has the ability to maintain production in the mature field.

"And we have proven that many times. When we took it from Natuna, so did Corridor," said Hilmi.

Another advantage of Medco, said Hilmi, is the ability to maintain cost leadership below $10 per barrel of equivalence.

"But when it comes to costs, today Alhamdulillah, one of Medco's advantages is to maintain cost leadership. And today, we can still overall our costs, overall below $10 per barrel of equivalence," concluded Hilmi.