Medco Energi is accelerating the development of its Sakakemang production sharing contract (PSC) in South Sumatra through an early production scheme, with a key Engineering, Procurement, and Construction (EPC) contract launched for the initial phase.

Sakakemang Development Plan

The development strategy involves an early production system targeted for 2027, to be followed by a full-field carbon capture and storage (CCS) development after 2028. This plan is based on a revised Plan of Development (POD) for the Kali Berau Dalam (KBD) field, which was initially approved for former operator Repsol. The POD is based on a natural gas capacity of 135 million cubic feet per day and includes a central processing facility (CPF) at the KBD-2X well pad, the drilling of two production wells, a one-kilometre pipeline to connect to the existing Transportasi Gas Indonesia (TGI) pipeline, and a 20-kilometre liquid CO2 pipeline to Medco's Grissik central gas plant. The KBD field's gas contains 26% CO2.

Phase 1A EPC Workscope

The EPC workscope for the Sakakemang Phase 1A early production project includes:

• Wellsite facilities at the KBD well pad area.
• A 22.5-kilometre, 16-inch diameter raw gas pipeline (clad with corrosion resistant alloy) from the KBD well location to the Grissik central gas plant on the adjacent Corridor PSC.
• A 40-kilometre, four-inch diameter water injection pipeline from the Grissik plant to the North Sambar manifold, which will be constructed of non-metallic materials.

Contract Details and Prequalification

Prospective bidders for the Sakakemang EPC contract must register and collect prequalification documents by 30 March. An online clarification meeting is scheduled for 1 April, with the submission deadline for prequalification documentation set for 7 April 2026. This contract has a minimum local content (TKDN) requirement of 57%. Medco operates the Sakakemang PSC (expiring 2040) with a 45% stake and holds significant interests in the TGI pipeline (40%) and the adjacent Corridor block (70%).

Separate Rig Tender for Madura Offshore

In a separate procurement process, Medco is also seeking a jack-up drilling rig for its Madura Offshore working area offshore East Java. The estimated one-year contract, which includes one firm well, is scheduled to start between 1 September and 31 October this year. The prequalification deadline for this rig charter is 31 March. While the minimum TKDN for associated services is only 5%, Medco has strict bidding stipulations based on the rig's flag:

• For an Indonesian-flagged unit: Bidders can be a domestic investment company (PMDN), a consortium, or a foreign company, provided a PMDN leads any consortium and contributes at least 30% of the contract value.
• For a foreign-flagged unit: Bidders must be a PMDN company or a consortium including PMDN companies, with domestic companies performing a minimum of 10% of the contract value.

Producing assets on the Madura Offshore block include the Meliwis gas field, which started production in 2020.