IOC closes in on Medco stake

Indian Oil Corp (IOC) has admitted it is close to acquiring a 40% stake in Indonesian oil and gas exploration firm PT Medco Energi International for US$600 million.

Around 85% of Medco’s equity is owned by holding company New Links with the balance held by financial institutions and the public. Out of the 85%, Thailand’s PTT Exploration and Production Co has a 34% stake, 26% belongs to US fund manager Credit Suisse First Boston and the balance by the Panigoro family.

In a report published by India’s Financial Express paper, an anonymous IOC official said, “IOC is acquiring a 40% stake in the holding company out of PTT’s and the American fund manager’s combined shareholding. IOC will thus become one of the largest shareholders in Medco along with the Indonesian family.”

If it goes through, the Medco acquisition will be IOC’s first overseas buy and is part of the Indian firm’s plans to become a fully integrated company.

“With a foothold in the downstream sector, we aspire to acquire substantial stakes in oil and gas fields abroad to cut dependence on imports,” said the IOC insider.

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