PT Perusahaan Gas Negara... (PK) (USOTC:PPAAY)
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PT Medco Energi Internasional (MEDC.JK), Indonesia's largest listed oil company, and two state-owned companies have made a formal proposal to jointly acquire two of Exxon Mobil Corp.'s (XOM) dwindling offshore gas blocks in northern Sumatra, Medco said Thursday.

"If the acquisition is successful, Medco International Energi will hold 40% of the shares," with state-owned gas distributor PT Perusahaan Gas Negara (PGAS.JK) and state-owned fertilizer producer PT Pupuk Sriwidjaja Palembang, or Pusri, each holding 30%, Lukman Mahfoedz, president director of Medco, said.

As announced in August 2011, ExxonMobil is offering its entire stake in Exploration Indonesia Inc., ExxonMobil Oil Indonesia Inc. and Mobil LNG Indonesia Inc., which manage its liquefied natural gas operations in Aceh province.

The assets for acquisition include Block B, wholly run by ExxonMobil at its Arun gas field, and the North Sumatra Offshore field, run by Mobil Exploration Indonesia.

The gas from the fields is delivered to the Arun LNG processing plant, which is operated by PT Arun NGL Co.--a joint venture between state-owned Pertamina, Mobil Oil Indonesia Inc. and Japan Indonesia LNG Co.

The gas fields produced an average of 215 million cubic feet of gas a day plus associated liquids in 2010, Exxon has said.

The company considers the reserve no longer economically viable.

Exxon started gas production in Aceh in the late 1960s.

-By Deden Sudrajat; contributing to Dow Jones Newswires; +62 21 3983 1277; ben.otto@dowjones.com