Indonesia's Medco expansion plans bet on rising energy demand in Southeast Asia
Indonesia's biggest listed oil and gas company PT Medco Energi Internasional MEDC.JK plans "aggressive" expansions in Southeast Asia and the Middle East as it bets on rising energy demand, particularly from data centers, its president director said.
Medco last year announced the acquisition of the Sakakemang and South Sakakemang blocks on Sumatra island, only months after it increased its ownership in the adjacent Corridor gas block to 70% for $425 million. Medco has also been awarded Malaysia's Cendramas production sharing contract.
"The downstreaming activities (pushed by) the government, the construction of many data centers, new power plants, everything - it all requires new gas," Medco's president director Hilmi Panigoro said in an interview at his office in Jakarta.
"Despite this big pressure of climate change, we are still bullish on oil and gas, especially in this part of the world," he said. "The demand for all fossil-based energy, whether it is coal, gas, or oil is still increasing."
'Not planning to be flat.' Medco produced about one-fifth of Indonesia's gas output in 2024. It has interests in 26 oil and gas assets globally and reported $1.76 billion revenue in the first three quarters of 2025, the latest data available.
It is targeting production of 170,000 barrels of oil equivalent per day (BOEPD) in 2026, its highest-ever output.
"I'm not planning to just be flat. I want to grow ... So my direction for oil and gas business development is to stay aggressive, find as much as possible new reserves, acquisition, exploration, development, EOR," Panigoro said, referring to a technique to extract more oil and gas from depleting reservoirs.
Medco already has a presence in countries including Thailand, Oman, and Tanzania.
Panigoro said Medco aims to accelerate development of the Sakakemang gas block and deliver the first supplies by the end of 2027 to capture growing demand in Indonesia's Sumatra and Java - the world's most populous island.
Environmental concerns. Panigoro said his company was looking to innovate to reduce greenhouse gas emissions from its operations. "In the last five years, we have reduced our CO2 emissions by 20% - but our production is doubled," he said, adding, "the challenge for a fossil-based energy company like us is to make sure we do that, to basically help this climate change issue.
Medco is also tapping into opportunities arising from Indonesia's plan to make it mandatory to add bioethanol to gasoline, he added.
The company last week signed a deal with a unit of state energy firm Pertamina to restart Medco's ethanol plant.
President Prabowo Subianto's energy self-sufficiency agenda includes wider adoption of biofuels. Energy Minister Bahlil Lahadalia estimated that Indonesia would need 1.4 million kiloliters of bioethanol to implement the mandatory blend of 10% bioethanol in gasoline.
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