Medco and Anadarko can Nunukan deal

Indonesia’s Medco Energi and independent Anadarko Petroleum have reportedly ended a joint exploration agreement covering Medco’s Nunukan block in the country.

The pair signed a mutual termination agreement in December, ending plans to develop the 4917-square-kilometre offshore block in East Kalimantan’s Tarakan basin, the Platts news service reported. Under the deal Anadarko will refund Medco about $14 million that the company has spent on exploration on the block to date. The US company will still try to drill an exploration block on the block as stipulated under the agreement. If it fails to do so by 30 June 2010, Anadarko will pay Medco $25 million less any expenses incurred in attempting to drill, the news service said. Under a 2007 agreement, Anadarko had agreed to a staged farm in to 60% of the Nunukan block, and to take over operatorship of the project. An earlier exploration agreement proposed Anadarko earning a stake of up to 40% of Medco’s interest in certain PSCs for an investment of up to $80 million. Medco said in a statement to the Jakarta Stock Exchange that both agreements had now been ended.

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