JAKARTA (Bloomberg) -- PT Medco Energi Internasional, Indonesia's biggest publicly traded oil company by sales, and Kuwait Energy Co. plan a petroleum venture with the Somali government, an executive from the Jakarta-based producer said.

Medco and Kuwait would take minority stakes in the venture, to be established after the East African nation's parliament passes new oil industry legislation, Hilmi Panigoro, president director of the Indonesian company, said by telephone Wednesday. The size of the partners' stakes has not been decided, he said.
“Geologically, Somalia has quite big oil potential,” Panigoro said. Even so “we have to monitor the security situation, which is in process of being resolved,” before drilling.
Since 1991, when former dictator Mohamed Siad Barre was ousted, Somalia has been racked with inter-clan fighting. Clashes restarted in recent months, prompting thousands to flee the capital, Mogadishu.
Prime Minister Ali Mohamed Ghedi described the security situation as “precarious” on July 3 amid renewed hostilities and fighting among rival militias.
Medco and Kuwait Energy will buy a 49 percent stake in Somalia Petroleum Corp., Reuters reported Tuesday, citing government documents.
The Indonesian company's shares rose as much as 3.9 percent to 4,050 rupiah and traded at 4,000 rupiah at 11:17 a.m., headed for their biggest gain in two weeks.
Exploration outside Indonesia will help Medco meet its target of boosting output by 15 percent a year on average, Panigoro said in a Sept. 8 interview. The company has drilling contracts in countries including the U.S., Libya, and Oman.
Medco holds a 45 percent stake in two Yemen areas, where Kuwait is also a partner with 25 percent stake