Bapepam Criticizes Medco Energi

The Capital Market and Financial Institution Supervisory Board (Bapepam-LK) has blamed PT Medco Energi International Tbk for having sold the exploration right of the oil block of Brantas without reporting it to the authority.

The Chairman of Bapepam-LK A Fuad Rahmany said that the oil block have been sold by two units of public company without reporting it to Bapepam LK. In fact, there is public interest that should be considered.

PT Medco Energi Internasional Tbk and PT Energi Mega Persada Tbk have interests in the oil block that has been harmed by hot mud flood. As they have sold the interest, Bapepam could assess the transaction before it happened.

On March 16, Medco reported the sale of PT Medco E&P Brantas at US$100 to Prakarsa Group (PT Prakarsa Cipta Abadi and PT Prakarsa Cipta Selaras). Medco Brantas has 32% working interest at the oil block of Brantas Sidoarjo. Lapindo Brantas Inc has 50% interest and Santos (Brantas) Pty Ltd of Australia owns the rest 18%.

In November 2006 Energi Mega has sold Lapindo to Freehold without reporting the transaction to the authority.

Fuad said that the case of hot-mud has made the case of the two companies different to the ones of other companies. Unlike the others, the two companies face the problem on capital market as well as on the people around the mining area. It will be among the consideration for Bapepam to assess the two transactions.

When the assessment has been running, Medco has just explained who has become the buyer. But the authority will ask for all necessary information on the transaction. The authority will also assess the selling price of US$100 and the background on why Prakarsa Group bought the ownership at Medco Brantas.

Last Thursday, Bapepam LK's Bureau Chief of Financial Assessment, Nurhaida, said that the nature of sale of Medco Brantas and Lapindo Brantas is different. As Energi Mega is responsible to the scandal of hot mud flood, the buyer of Lapindo Brantas also has to have the capacity to handle the problem.