Langsa FPSO Resumed Operation

Tokyo, Jan. 5, 2005

MODEC, Inc. (TSE: 6269) announced today that its subsidiary Langsa FPSO Pte Ltd. has resumed the operation of FPSO "MV8 Langsa Venture" in Langsa TAC block, 150 km offshore Medan in the north Sumatra, Indonesia.

Langsa TAC development was initially started by Australian based Matrix Oil in November 2001 by using the FPSO "MV8 Langsa Venture" owned and operated by MODEC. The production has been suspended since October 2002 due to Matrix's financial problems.

As a successor of Langsa TAC operatorship, a joint venture company MEDCO MOECO Langsa Ltd. was established by PT. Medco Energi Internasional Tbk. of Indonesia and Mitsui Oil Exploration Co., Ltd of Japan. The JV anticipated an earlier production re-start from the Langsa field; however the issue of Pertamina's production permit has been delayed due to Pertamina's management change in August and Indonesian presidential election in September 2004.

On commencing the re-development of Langsa field, MEDCO MOECO Langsa Ltd. re-evaluated the reservoir of the Langsa field. The drilling of two new subsea wells, L3 and H4, was completed and the initial flow was received from L3 well. MEDCO MOECO Langsa Ltd. is currently preparing for the production from the existing L1 well and from the new H4 well. The production rate from Langsa field is expected to increase in March 2005.

Langsa FPSO Pte Ltd. was established for the owning and operating of FPSO "MV8 Langsa Venture" in Langsa field. MODEC, Inc. holds 60% and Sojitz Corporation holds 40% of its share. Currently Langsa FPSO Pte Ltd. employs approximately fifty Indonesia nationals on board and on shore.

FPSO MV8 Langsa Venture
FPSO MV8 Langsa Venture