Pertamina, Encore Agree to Cancel Stake Purchase

PT Pertamina won’t proceed with a plan to acquire a stake in Encore Energy Ltd., the parent of PT Medco Energi Internasional, after a deadline for the deal expired, a Pertamina spokesman said. Medco shares fell.

“The exclusive period between Pertamina and Encore International Ltd. to evaluate the stake purchase plan ended yesterday and the two companies agreed not to do the transaction,” Mochamad Harun said by phone today in Jakarta. Encore International owns 60.6 percent stake in Encore Energy.

Pertamina, Indonesia’s state-owned oil company, said Oct. 15 it signed an agreement to buy Encore International’s stake in Encore Energy, which would have resulted in the company owning a 27.9 percent stake in Medco.

Medco, Indonesia’s largest listed oil company, dropped 3.7 percent to 3,225 rupiah a share at the 4 p.m. Jakarta time close, the lowest in two months. The stock has risen about 32 percent this year, compared with a 42 percent gain in the benchmark Jakarta Composite Index.

“We will explore other cooperation, look for other formats,” Medco President Commissioner Hilmi Panigoro told reporters in Jakarta today. “Perhaps we will expand joint operations in developing oil assets.”

Pertamina and Medco will jointly develop oil assets in Libya, Pertamina President Director Karen Agustiawan said July 20. Medco has drilling rights in the Area 47 oil and gas block in the African country, which is expected to produce 50,000 barrels a day by 2014.

Pertamina and Medco also own 29 percent and 20 percent respectively of the Donggi-Senoro liquefied natural gas plant on Sulawesi in eastern Indonesia.

Arifin Panigoro, a shareholder of Encore, didn’t immediately answer calls to his mobile phone seeking comments.

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