Photo by Medco Power
JAKARTA (TheInsiderStories) – Indonesian oil and gas producer PT Medco Energi International Tbk (IDX: MEDC) announced that the company has acquired 77.68 percent of the shares in PT Saratoga Power, from PT Saratoga Investama Sedaya Tbk (IDX: SRTG) and other shareholders. The deal is said to be worth Rp1.63 trillion (US$120.6 million),Through this transaction, the company increases its effective ownership of PT Medco Power Indonesia (MPI), widening from 49 to 88.62 percent. Meanwhile, the 11.38 percent of the shares in MPI held by International Finance Corporation remained unchanged.

MPI, established in 2004, is Indonesia’s leading medium-scale power producer, with a main focus of acquiring its energy from natural gas and geothermal sources.

MPI currently operates over 520MW of installed gross capacity (as of September 2017), with the Sarulla Unit 2 geothermal power facility expected to go into commercial operation in October 2017, one month ahead of schedule.

MPI’s gross capacity will increase as Sarulla Unit 3 (110MW) starts to operate commercially, in the second quarter of 2018, and Riau CCPP (275MW) by 2021.

MPI Operation & Maintenance (O & M) business has also expanded, currently operating over 2,000 MW of power plants through third parties. The expansion is driven by two new O & M contracts signed at the end of 2016, whereby MPI operates the Sarulla Geothermal and PLN gas turbine units at eight locations throughout Indonesia.

Hilmi Panigoro, President Director of Medco Energi, said that “this acquisition allows the company to regain control of the majority of MPI and strengthen our position in the power generation sector, which is expected to grow by 9 percent per annum over the next ten years.”

In the first half 2017, Medco Energi’s revenue was $403.5 million, 54.3 percent higher than the same period last year, with higher sales and increased average realized price of $49.3/bbls (+28.8 percent) for oil and $5.6/mmbtu (+32.8 percent) for gas. The Company recorded 1H 2017 gross profit of $198.2 million and a 49.1 percent gross margin.

Before the announcement of Medco Energi’s acquisition, Saratoga made known its intention to take over the Indonesian assets of Australian copper miner Finders Resources Ltd (ASX: FND), for an estimated price of $177 million. Finders Resources is a mining company listed on the Australia Stock Exchange, with two key projects in Indonesia. The company holds a 95 percent stake in Wetar Copper in Maluku Province.

Writing by Elisa Valenta, Email: