TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Govt awards four firms with CBM contracts for US$20m of investment

The government has awarded four coal-bead methane (CBM) development contracts in Kalimantan to a group of mining companies requiring a total investment of at least US$20 million during the next three years

Alfian (The Jakarta Post)
Jakarta
Fri, November 14, 2008

Share This Article

Change Size

Govt awards four firms with CBM contracts for US$20m of investment

The government has awarded four coal-bead methane (CBM) development contracts in Kalimantan to a group of mining companies requiring a total investment of at least US$20 million during the next three years.

The four companies are a consortium of PT Pertamina Hulu Energi Metana Kalimantan A-Sangatta West CBM Inc, a consortium of Kutai West CBM Inc-Newton Energy Capital Limited, PT Indobarambai Gas Methan, and PT. Barito Basin Gas, Evita H. Legowo, Director General for Oil and Gas, announced Thursday.

The government and the companies' representatives inked the contracts on the same day.

Evita said the companies have pledged to invest a total of $16.3 million for exploration activities in the first three years and $4 million for signature bonuses, payable to Government.

Pertamina Hulu Energi Metana, subsidiary of state oil and gas company PT Pertamina and its partner won a contract to extract gas from coal seams in the Sangatta I block, while the Kutai West CBM Inc-Newton Energy Capital Limited consortium will develop Kutai Block.

Indobarambai and Barito Basin won exploration rights in Barito Banjar I and Barito Banjar II, respectively.

Evita said the CBM contracts had adopted the production sharing contract (PSC) scheme as applied to oil and gas contracts.

"The government will get on average 55 percent of the revenue generated by the sale of gas produced from those blocks," Evita said.

CBM is a method of extracting methane from coal seams. Once the methane has been separated it is an alternative to natural gas. Indonesia has around 453 trillion cubic feet of coal-bed methane reserves or double those of natural gas, according to Bloomberg.

Evita said the government would open tenders for several other CBM blocks in January next year.

"CBM blocks have always attracted many investors."

Previously the government has already awarded three CBM projects requiring a total investment of $17 million covering the costs of three years of exploration.

On Thursday, the government also officially inked contracts for 29 new oil and gas blocks representing a total investment of $781.9 million for the first three years of exploration plus total signature bonuses of $110 million.

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.