Brantas Block of Medco Worth US$100

PT Medco Energi Internasional Tbk is likely to set the provision of US$60 million - US$70 million in its 2006 financial reports as the consequence of hot mud floods in Sidoarjo of East Java.
On March 2006 Medco has reported that it has sold its ownership at PT Medco E&P Brantas at US$100 to Perkasa Group. The group is likely related to Bakrie Group.

The provision is US$60 million - US$70 million. But the non cash part will be written off. It is less than 4% of Medco's asset of US$1.7 billion.

In its third quarter report, Medco has provided the provision of US$14 million so that the company's net profit declined by 16.3% to US$47.19 million from US$56.37 million on the same period of 2005.

On the impact of the provision to the full year's net profit Hilmi said the net profit will be affected by the write off.

In the meantime Medco has sold 100% shares at PT Medco E&P Brantas, a unit of Medco having the working interest of 32% at Block of Brantas. Lapindo Brantas controls 50% of the oil blocks, while the rest 18% are controlled by Santos (Brantas) Pty Ltd.

Medco said it has signed the transaction of US$100 with PT Prakarsa Cipta Abadi and PT Prakarsa Cipta Selaras on March 13.