MOECO acquires interest in PSC for Onshore Block Merangin I, South Sumatra, Indonesia

August 1, 2005 Project

Mitsui Oil Exploration Co., Ltd. ("MOECO", Head office: Hibiya Central Bldg. 2-9, Nishi Shimbashi 1-Chome, Minato-ku, Tokyo, JAPAN / President: Mr. Yoshiyuki Kagawa) is pleased to announce that, subject to approval of the Government of the Republic of Indonesia, it has acquired a 20% working interest in the Production Sharing Contract covering onshore block Merangin I (Total area: approximately 3,226.75 square kilometers) located in southern part of Indonesia's Sumatra Island from operator of the block, PT Medco E&P Merangin which is a subsidiary of PT Medco Energi Internasional Tbk ("MEDCO", a listed petroleum exploration and production company on the Jakarta Stock Exchange). After the acquisition, MEDCO will hold a 41% interest in such block with the remaining 39% interest in the block being held by PTTEP Offshore Company Limited, a subsidiary of PTT Exploration & Production Public Company Limited ("PTTEP") of Thailand. MOECO participates in the block through its wholly owned subsidiary company, Moeco Merangin Co., Ltd.

Based on its geological analyses, MOECO has been focusing on this region as a promising target for new exploration and feels the Merangin I PSC area has significant crude oil potential. The first wildcat well is planned to spud around the end of this September.

MOECO is currently active in Thailand, Cambodia, Vietnam, Australia, Middle East, the United States and Indonesia. MOECO's Indonesian operations include the producing offshore Langsa TAC in which it is acting as the Operator thorough its subsidiary Medco Moeco Langsa Limited, a joint venture with MEDCO.

MOECO's acquisition of an interest in the Merangin I PSC is further step for MOECO in realizing its strategy of expansion of its business activities in Indonesia. An exploration success in the block would contribute to and complement its business activities and strengthen its business structure and production base. MOECO is also pleased to be able to make a contribution to the economic growth of Indonesia through its investment and increased job opportunities for the Indonesian people.