Medco Energi Internasional is the first publicly owned oil company in Indonesia.
Medco is celebrating more than forty years of presence and continuing successes as one of the leading energy companies in Indonesia and Southeast Asia.
Medco Energi International became a public company in 1994, and today it operates in eight countries.
It has interests in oil and gas exploration and production, geothermal power generation, gas distribution and trading, and mining.
The year 2022 is a wonderful year for Medco Energy. It booked net profits of 531 million USD in 2022 which is more than 10 times higher than the US$ 47 million it made in 2021. The company produced 163 million barrels of oil equivalent (BOE) in 2022, a 73% increase over the previous year.
The Beginning of Medco
Medco Energi has come a long way in a short time since it started as an oil drilling service company in 1980, Meta Epsi Pribumi Drilling Company (MEDCO).
Founded by Mr. Arifin Panigoro, Medco Energi was a visionary and a trailblazer ever since its beginning.
The Acquisition of Stanvac Indonesia
The first breaks that made Medco became big and successful were the acquisition of Stanvac’s oil and gas assets in South Sumatera in 1995, and the following discovery of the big oil fields in Kaji and Semoga in the Rimau Block, in South Sumatera.
Stanvac Indonesia, set up by Standard Oil of New Jersey in 1912, was one of the oldest and biggest oil companies in Indonesia during the Dutch colonial era.
The Acquisition of ConocoPhillip’s Interest in West Natuna Sea Block B PSC
Medco Energi further expanded in 2016 when it purchased ConocoPhillips’s 40% interest in the West Natuna Sea Block B and took over the operatorship of the block.
This acquisition added substantial gas and liquids reserves and increased Medco Energi’s daily production by over 35%.
The block is in approximately 300 feet of water and had 11 offshore platforms, four producing subsea fields, and one FPSO – the Belanak FPSO – in addition to two dedicated floating storage and offloading vessels.
The Belanak FPSO was described as one of the most complex FPSO in the world. It was the first offshore liquefied petroleum gas (LPG) facility on a floating vessel in the Asia Pacific region when it was commissioned in 2004.
The fields include the Belanak field, South Belut field, Hiu field, Kerisi field, North Belut field and Bawal field.
The produced natural gas is sold to Singapore and Malaysia through a 654 KM long 28 inch gas pipeline.
Medco Energi also assumed the operatorship of the Onshore Receiving Facility in Singapore following the acquisition.
Acquisition of Ophir Energy
Medco Energi Internasional continued to expand by acquiring Ophir Energy, a London-based independent in 2019.
The acquisition of Ophir Energy increased Medco Energi’s daily oil and gas production by 29% to 110,000 BOE per day.
By taking over the operatorship of Ophir Energy’s offshore Bualuang field in Thailand, Medco Energi became a leading regional oil and gas player in South East Asia.
Acquisition of Corridor PSC and Transasia Pipeline
On March 3, 2022, Medco Energi acquired the entire remaining assets of ConocoPhillips in Indonesia..
Through this acquisition, Medco Energi is now the operator of the Corridor block with 54% interest and has 35% ownership of Transasia Pipeline Company.
The Corridor PSC has two producing oil fields and seven producing gas fields located onshore South Sumatra, Indonesia, adjacent to MedcoEnergi’s existing operations in South Sumatra. The Corridor is the second-largest gas-producing block in Indonesia.
Through Transasia, Medco Energi International now owns a minority interest in the gas pipeline network supplying Central Sumatera, Batam, and Singapore customers.
Acquisition of the Beluga Work Area
Medco Energi was awarded the Beluga exploration PSC on September 21, 2023. The work area is located close to its existing South Natuna Sea Block B infrastructure.
Medco Energi Internasional Q1 2023 Performance
Net profit – 119.5 million USD
Oil and gas production – 162,000 BOEPD
Average price of oil sold – $75.2 per barrel
Average price of gas sold – $7.2 per MMBTU
Oil and gas lifting cost – $7.4 per BOE
Oil and gas capital expenditures – $99 million
The capital expenditures are for the development in Natura and Corridor work areas.
With this latest acquisition, Medco Energi is now one of the largest oil and gas operators in Indonesia.
Besides acquiring producing assets, Medco Energi is also active in exploring new oil and gas reserves.
Its 2020 exploration drilling campaign in the South Natuna Sea Block B was 100% successful. It tested hydrocarbon in all the four exploration wells it drilled. The wells are Bronang-2, Kaci-2, Terubuk-5, and West Belut-1.
Medco Energi is planning to develop these fields.
As Medco Energi celebrates its more than 40 years of progress, with its solid management team, it certainly will continue to march toward an even brighter future.
Top Management Team of Medco Energi
Here is the top management team of Medco Energi.
Muhammad Lutfi – President Commissioner
Hilmi Panigoro – President Director
Roberto Lorato – Chief Executive Officer
Anthony R Mathias – Chief Financial Officer
Ronald Gunawan – Chief Operating Officer
Amri Siahaan – Chief Human Capital and Business Support Officer
Myrta Sri Utami – VP Corporate Planning & IR
Siendy K Wisandana – Head of Legal Counsel and Secretary
As a final note, Dr. Arifin Panigoro, the man who started it all and the founder of Medco group of companies died on 27 February 2022 at age of 76.
The first oil exploration in Indonesia started not long after Colonel Drake successfully drilled the first oil discovery well in Pennsylvania in the United States in 1859.
By 1869, Dutch businessmen in Indonesia, known as the Netherlands East Indies at that time, had noticed and recorded 53 oil seepage locations in Sumatera, Java, and Kalimantan.
Then the first oil well drilling in Indonesia took place in 1871 in West Java.
However, commercial discoveries were made only several years later when a Dutch businessman drilled successful exploration wells in Pangkalan Brandan in North Sumatera in 1885 and Sanga-Sanga in East Kalimantan in 1892.
These two discoveries caught the attention of the world and put Indonesia on the map as one of the countries with interesting oil potentials.
By 1900 there were already 18 oil companies searching for oil in the Netherlands East Indies (NEI). All these companies were either Dutch companies or non-Dutch companies registered in Nederland. The high level of activities resulted in significant oil discoveries in the early 1900s.
Following the oil discoveries, refineries were built in Pangkalan Brandan in North Sumatera in 1892, Sungei Gerong in South Sumatera in 1926, Balikpapan in East Kalimantan in 1922. By 1940, there were already seven refineries in NEI: three in Sumatera, three in Java, and one in Kalimantan.
In 1938, the daily crude oil production was about 140,000 BOPD and in 1953 it was about 190,000 BOPD.
The high level of oil production and refining activities from 1900 to 1940 made Indonesia well-known as one of the world’s significant crude oil producers and refined product suppliers at that time. In fact, Indonesia was so well-known for its oil it became involved in World War II.
Recognized as a significant oil producer, Indonesia was invited to become a member of OPEC 1962.
The three oil companies that produced about 90% of all the petroleum in Indonesia during the Dutch colonial period are:
BPM – Bataafsche Petroleum Maatschappij
STANVAC – Standard Vacuum Oil Company
Here are the amazing stories of these three big oil companies operating in Indonesia before 1945.
BPM is Bataafsche Petroleum Maatschappij, also called the Batavian Oil Company. Batavia, which is Jakarta today, was the center of the NEI government.
BPM was established in 1907 by KNPM (Koninklijke Nederlandsche Petroleum Maatschappij) also known as Royal Dutch Petroleum Company and Shell Trading and Transport Company to explore and produce oil in the Netherlands East Indies.
Royal Dutch Petroleum Company owned 60% and Shell owned 40% of BPM.
Before BPM was set up, there were already as many as 18 oil companies operating in the Netherlands East Indies (NEI) from North Sumatera, Java, Borneo, and all the way to Papua.
BPM quickly took over almost all of these companies and dominated the oil industry in Indonesia. By 1920, it had controlled more than 95% of crude oil production in Indonesia.
In 1921, as the government of the Netherlands East Indies wanted to take part in the booming oil business in Indonesia, NEI and BPM formed another company called NIAM (Nederlands Indische Aardolie Maatschappij).
Many big changes took place in the oil industry after Indonesia declared its independence in 1945. The first big change was the takeover by the government of Indonesia the NEI’s 50% ownership in NIAM.
This marked the beginning of an Indonesian government-owned oil company. It also started a working relationship between BPM and the government of Indonesia. With this relationship, BPM managed to extend its activities in Indonesia until 1965.
In 1965, BPM sold all its assets in Indonesia to the Indonesian state-owned company PN Permina for US$110 Million. Permina later became Pertamina.
BPM operations in Indonesia were extensive. They stretched from the western part of Indonesia to the eastern part of Indonesia.
Here are the operations of BPM in various parts of Indonesia.
BPM In Borneo
In 1907, right after it was formed, BPM acquired the oil fields and refinery in Balikpapan from Mathilda company. It also acquired the oil fields in Sanga Sanga and Tarakan which had been discovered previously by KNPM (Koninklijke Nederlandsche Petroleum Maatschappij).
BPM expanded its exploration and production aggressively in East Borneo and continued to discover several other fields in these areas.
On the small island of Tarakan, BPM drilled 700 oil wells and built a refinery.
Production continued to increase and in the 1920s the Tarakan wells produced about 18,000 BOPD, a third of the total oil production in the whole Dutch East Indies.
BPM in North Sumatera
BPM acquired from KNPM the oil fields and the refinery located at Pangkalan Brandan. BPM also took over the operations of the oil tanking and the oil export facilities at Pangkalan Susu. Pangkalan Susu was the first oil-exporting port in Indonesia.
BPM in Java
In Java, BPM acquired the oil assets of DPM (Doordsche Petroleum Maatschappij), a Dutch oil company established by Adriaan Stoop in 1887.
DPM had discovered and operated the Kruka Field and the Djabakota Field near Surabaya in East Java. DPM also had built the oil refinery in Wonokromo. Completed in 1893, this was the first oil refinery in Indonesia.
By acquiring DPM, BPM also became the owner of some thirty oil fields in East Java including another refinery located in Cepu which was built in 1894.
BPM In South Sumatera
In South Sumatera, BPM took over SPPM (Sumatera Palembang Petroleum Maatschappij). SPPM had been operating the oil fields in its concessions in Banyuasin and Jambi.
BPM also acquired the oil assets of MEPM (Muara Enim Petroleum Maatschappij). MEPM had discovered the Muara Enim field and built the Plaju Refinery.
BPM In Irian Jaya
In 1935 BPM expanded its search for oil into Irian Jaya. For this venture, along with other partners, BPM formed a joint venture company named NNGPM (Nederlandsche Nieuw Guinea Petroleum Maatschappij) with exploration rights for 25 years.
By 1938 they had discovered the Klamono oil field. followed by Wasian, Mogoi, and Sele fields.
However, for commercial reasons, these fields were not developed.
STANVAC – Standard Vacuum Oil Company – started as NKPM (Nederlandsche Koloniale Petroleum Maatschappij) in 1912. NKPM was set up in Nederland by the American company Standard Oil of New Jersey so it could explore for oil in Indonesia.
Since Indonesia was under the control of the Netherlands East Indies at that time, Jersey Standards had to set up NKPM as a Dutch-registered and Dutch-managed company with headquarters located in The Hague.
NKPM began to make exploration in Java and South Sumatera in 1914.
It was in South Sumatera NKPM found its liquid gold. Operating from the city of Palembang, it discovered the Petak field in 1914, the Trembule field, and the huge Talang Akar field in 1921. These discoveries prompted NKPM to construct the famous Sungai Gerong oil refinery.
In 1922 NKPM changed its name to SVPM (Standard-Vacuum Petroleum Maatschappij).
It also constructed the 130 Km long pipeline from Pendopo area to Sungai Gerong to bring the crude oil from the prolific Talang Akar field to the refinery.
The Sungai Gerong refinery began operating in 1926 and became the largest and important oil refinery in South East Asia.
It was so important that the refinery was occupied by Japanese forces from 1942 to 1945 during World War II.
To meet the increasing demands for petroleum products in Africa and the Asia Pacific, Standard Oil Company of New Jersey and SOCONY (Standard Oil Company of New York) jointly created STANVAC (Standard Vacuum Oil Company) in 1933.
This was a synergistic partnership as Standard Oil Company of New Jersey had the oil production capacity and SONONY had the marketing facility.
The newly created Stanvac in the Netherlands East Indies consisted of three companies: Standard Vacuum Petroleum Maatschappij (SVPM), the Standard Vacuum Sales Company (SVSC), and the Standard Vacuum Tankvaart Maatschappij (SVTM).
Stanvac took over all the assets of SVPM in Indonesia and became a full-fledged oil company involved in oil exploration and production, refining, transportation, and distribution in more than 50 countries.
However, Stanvac continued to operate under its Dutch company name – SVPM – in the NEI.
Stanvac produced oil from many fields in South Sumatera. The notable ones were Talang Akar, Djirak, Benakat, Radja fields.
In 1934, Stanvac expanded its operations to Central Sumatera. Here it discovered and developed the well-known Lirik field and later the Binio field.
Things began to change after World War II and the declaration of independence of Indonesia.
It was after the declaration of independence by Indonesia in 1945, to distance itself from its Dutch connection, Stanvac began calling itself Stanvac Indonesia as its company name to show its American origin.
In so doing, Stanvac was able to keep its assets and continue to operate in the newly independent Indonesia.
In 1960, as Indonesia wanted to have more control of the oil operation and business, it introduced the 1960 Oil Law which stated that all foreign oil companies must operate as a contractor for the Indonesian government.
On 24 September 1963, Stanvac signed the “Contract of Work” agreement with Indonesia’s Pertambangan Minjak Nasional (Permina).
The contract allowed Stanvac to continue to have full control of its oil exploration and production operations in Indonesia. Under this agreement, Stanvac must sell its refinery within ten to fifteen years.
However, Stanvac had to sell its Sungai Gerong refinery to Pertamina in 1969.
Stanvac Indonesia continued to operate its oil fields until finally in 1995 it sold all its assets to Medco Energi for 88 million USD.
While Stanvac was operating in Indonesia, one of its parent companies, Mobil Oil, assumed the Arun block in Aceh in 1968. It went on to discover the super giant Arun gas field in 1971.
Interestingly, the two parent companies of Stanvac, Exxon and Mobil, merged in 1999 to become Exxon Mobil Corporation.
CALTEX was established in 1936 by Standard of California and Texaco to explore and produce oil in Indonesia and to expand its oil business in the Asia Pacific.
Earlier in 1924, The Standard of California had sent its team of geologists to Indonesia.
To operate in the Netherlands East Indies at that time, Caltex must obtain oil concessions from the government of NEI (Nederlands East India) who was the ruler of Indonesia at that time. To do so, in 1930, Caltex established NPPM (Nederlandsche Pacific Petroleum Maatschappij), a Nederland registered company with its headquarters located in The Hague. Also, the company must be run by Dutch nationals.
In the same year, Caltex received its first oil concession in the Rimba area which is now known as the Rokan Block in Central Sumatera.
Soon after that Caltex began to find oil, but it was in 1941 that Caltex discovered the huge Duri field. Due to the high pour point of its low gravity crude oil, it was necessary to use steam-flood to drive out the oil. Due to the success of the steam flood method, the Duri field became known as one of the largest steam-flood projects in the world. In spite of the huge challenges to produce the field, it has produced more than 2.64 billion barrels of oil so far.
Several years later Caltex went on to discover another giant oil field, The Minas field.
The story of the Minas field discovery is very interesting. In 1940, at the beginning of World War II, Caltex had started the drilling of its exploration well in the Minas area. However, before the drilling was completed, Caltex had to abandon the drilling as the Japanese army was coming to occupy the area and to take over the oil facilities.
The Japanese army engineers resumed the drilling of the well in 1943 and discovered oil when it drilled down to 2600 feet deep.
At the end of the war, Caltex regained control of its oil assets and continued to investigate the Minas field. After drilling several additional wells, Caltex confirmed the discovery of the huge Minas oil field.
Caltex went on to discover many smaller oil fields in its concession area.
By the late 1950s, Caltex became one of the largest oil producers in Indonesia. At its peak in 1973, Caltex produced about 1 million BOPD from the Duri, the Minas, and about 80 smaller oil fields. Caltex holds the record of having the highest daily crude oil production rate in Indonesia.
Caltex completed the construction of a crude oil export terminal in Dumai in 1958.
Caltex signed a work contract agreement with Indonesia in 1961 giving it the right to continue to operate the Rokan block until 2001. Later on, Caltex managed to obtain a work contract extension to operate the block for another 20 years until 2021.
The two owners of CALTEX, Chevron, and Texaco merged in 2001 to become ChevronTexaco Corporation. Later on, in 2005, ChevronTexaco Corporation dropped the name Texaco and renamed the company as Chevron Corporation.
Following the name change of its parent company, Caltex in Indonesia which was initially incorporated as PT Caltex Pacific Indonesia changed its name to PT Chevron Pacific Indonesia.
By 2008, Chevron Pacific Indonesia had produced 11 billion barrels of crude oil from the extremely prolific Rokan block.
Although the Rokan block has been producing oil for more than 80 years, it still has 2 billion barrels of estimated producible reserves. It is considered as an important block in Indonesia’s ambition to increase the daily oil production in Indonesia to one million barrels by 2030.
Although the name Caltex disappeared in Indonesia after the name change, the Caltex petroleum brand is still alive in many countries in the Asia Pacific.
These three companies of the past were great companies to work for. Since most of their oilfields were located in the middle of a jungle, the companies provided good and well-rounded facilities – schools, clinics, cafeterias, places for worship, sports, and entertainment – to their employees and their families.
Many people and children of those who had worked for these companies have fond and colorful memories of the companies.
To me, the one that is the most interesting is BPM.
The joint venture of Royal Dutch Petroleum Company and Shell Trading and Transport Company that formed BPM – Bataafsche Petroleum Maatschappij – in Indonesia in 1907 sowed the seed that eventually grew into the current giant Shell Oil Company.
Also, BPM had a role in the rise of Pertamina when Pertamina took over all the assets of BPM in 1965.
Eighty years ago, CALTEX discovered the huge Duri oil field in the Rokan block in Riau, Sumatera.
Oil was found at a shallow depth of 400 feet when CALTEX began drilling its exploration wells in 1941. However, the exploration drilling was interrupted due to the onset of the World War 2.
After the war ended, CALTEX managed to obtain the approval from the newly formed government of Indonesia to operate in the Rokan block under a work contract scheme. Eventually, oil production from the Duri field began in February 1954.
The giant Duri field – 10 km wide and 18 km long – is one of the many oil fields discovered in the Rokan block. Minas is another giant oil field discovered in this block.
Oil production peaked at 65,000 BOPD in the 1960s.
Due to the high viscosity of the low gravity oil, to enhance the production, the steam injection was introduced in 1985.
The Duri steam flood project was so successful that it became one of the largest and the best steam floods in the world.
Thanks to the successful steam injection, Duri oil production increased significantly to 185,000 BOPD.
After 30 years of the steam flood, the production had declined to about 50,000 BOPD by 2017.
With more than 2.6 billion barrels of cumulative oil produced, the giant Duri field is still producing today.
Chevron handed over the operatorship of the Duri field and the Rokan block to Pertamina in August 2021.
With Pertamina Hulu Rokan as the new operator, the Duri field and the Rokan block are undergoing a massive expansion.
More than 400 wells were drilled in the Rokan block with mostly done in the Duri field in 2022 and the company plans to drill another 500 wells in 2023.
Pertamina built a 17 MWp solar plant in the Duri field in 2022 to meet the electricity need of the field.
Oil companies in Indonesia and SKK Migas were buzzing with activities and excitement in 2019.
Exploration and Production Results
First, here are the combined performance results of the exploration and production activities of all the oil and gas production sharing contractors in Indonesia operating under the supervision of SKK Migas in 2019:
Total number of active work areas: 201
Average daily crude oil production: 746,000 BOPD
Average daily gas production: 5934 MMSCFD
Combined total daily oil and gas production: 1,806,000 BOEPD
The total value of the investment: 11.49 Billion USD
Number of development wells completed: 322
Number of exploration wells drilled: 36
The volume of oil and gas in place discovered: 113 BBOE
2-D seismic surveys completed: 12169 KM
3-D seismic survey completed: 6837 KM2
On the oil and gas discovery front, it is nice to note that REPSOL and partners PETRONAS and MOECO discovered a giant gas field in February 2019 in the Sakakemang block in South Sumatera. With 2 trillion cubic feet of recoverable gas reserves, it is one of the largest gas discoveries in the world in 2019 and also the most significant gas discovery in Indonesia in the last 18 years.
On new field development, Inpex Indonesia and SKK Migas made significant progress in developing the huge Abadi gas field and constructing the LNG plant. It was decided the LNG plant will be built in the Yamdena Island in the Maluku province of Indonesia.
The 15 Largest Oil Producers in Indonesia
Here are the 15 largest oil producers operating under the production sharing system in Indonesia in 2019:
Pertamina Hulu Mahakam
Pertamina Hulu Energi Offshore North West Java (PHE ONWJ)
Pertamina Hulu Energi Offshore South East Sumatera (PHE OSES)
PetroChina International Jabung
Medco E&P Natuna
Petronas Carigali Ketapang
Pertamina Hulu Kalimantan Timur
BOB Bumi Siak Pusako Pertamina Hulu
Pertamina Hulu Sanga Sanga
Medco E&P Rimau
JOB Pertamina Medco Tomori Sulawesi
The 15 largest natural gas producers in 2019
Here are the 15 largest gas producers in Indonesia in 2019:
Pertamina Hulu Mahakam
ENI Muara Bakau
JOB Pertamina Medco Tomori Sulawesi
Premier Oil Indonesia
PetroChina International Jabung
Medco EP Natuna
Kangean Energy Indonesia
PHE West Madura Offshore
Pertamina Hulu Energi Jambi Merang
Mubadala Petroleum Indonesia
PHE Offshore North West Java
The SKK Migas
The SKK Migasof Indonesia has also been very proactive in its roles as the supervisor of the production sharing contractors to facilitate their exploration and production activities.
With the vision to increase the oil production in Indonesia to one million barrels per day by 2030, SKK Migas instituted the Integrated Operation Center (IOC) and the One Door Service Policy (ODSP) in 2019.
The Integrated Operation Center (IOC)
SKK Migas launched the Integrated Operation Center (IOC) in 2019. With the IOC, SKK Migas now has online and realtime access to information and data related to the exploration, drilling and production activities of the production sharing contractors in all work areas.
The IOC allows SKK Migas to monitor the daily field activities of all operators, understand the field situations and make prompt recommendations.
The objectives of SKK Migas in establishing the OIC are to keep the oil and gas operations go smoothly and achieve the production targets.
Currently here is the information that is being monitored by the Integrated Operation Center:
Oil and gas production (Production Dashboard)
Oil and gas lifting (Oil and Gas Lifting Dashboard)
Stock Management (Stock Management Dashboard)
Plant Operation (Plant Information Management System – PIMS)
Vessel tracking (Vessel Tracking Information System – VTIS)
Real-Time Drilling Operation
Emergency responses (Emergency Response Center – ERC)
The One Door Service Policy (ODSP)
SKK Migas also introduced One Door Service Policy (ODSP) in 2019. Through ODSP, the applications of all the permits related to exploration, drilling, field development, and production can be processed in one place.
SKK Migas will work with and support all the production sharing contractors in preparing the required documents and submitting the applications to obtain the various permits they need.
This is a very significant service because of the various types of permits that oil operators must apply. With this one-door policy, SKK Migas is hopeful that the various permits can be obtained promptly, and the oil and gas exploration and production targets can be achieved.
The One Door Service Policy consists of four work-groups that will help the production sharing contractors deal with the following type of permits:
Permits related to land acquisition and use
Permits related to the environment, safety and security
Permits related to the use of resources and infrastructure
Permits related to the use of materials and human resources from outside Indonesia.
Several exploration and production targets were exceeded in 2019 and SKK Migas is hopeful the new 2020 targets can be achieved also by the end of the year.
This article is adapted from the information posted by SKK Migas.