Indonesia’s Medco Energi Internasional suffered impairment losses of $180.2mn on its Area 47 acreage in the Ghadames basin in Libya in 2016, the firm announced in its H1 2017 results published in late September, but it doesn’t appear to have written off the asset. The firm also reported a 2016 impairment of $92.6mn on its acreage in Tunisia, among total impairments in 2016 of $278.5mn. Medco had put in place plans in 2015 to cut capital expenditure by 20-25% to $270mn, according to Indonesian online fund marketplace Bareksa.com (MEES, 24 April 2015).
Medco has a 25% share in Nafusa Oil Operations, a joint operating company formed in March 2013 with NOC and the Libya Investment Authority (LIA), the country’s sovereign wealth fund, to develop the Area 47 block, near the borders with Tunisia and Algeria. Area 47 yielded by far the largest discovery from the four international licensing rounds held since the 2004 introduction of the EPSA-IV model. Canada’s Verenex carried out the exploration phase on Area 47 before its controversial expropriation by the LIA. The block has had consistently strong drilling results, with 18 of 20 exploration wells yielding discoveries. According to a DeGolyer and MacNaughton report in September 2008, gross contingent reserves in Area 47 are an estimated 703mn boe. (CONTINUED - 561 WORDS)
