T

he Energy and Mineral Resources Ministry signed Monday seven coal bed methane (CBM) and one oil-and-gas contracts, earning a total of US$13.26 million in signature bonuses, and offered eight CBM and one oil-and-gas working areas.

“Investments from the seven CBM contracts total $48.93 million and the government earns a $8.26 million signature bonus,” the ministry said in a statement.

Investment from the oil-and-gas contract is $19.5 million with $5 million in signature bonuses.

Three of the working areas are in East Kalimantan and four in South Sumatra.

The Melak Mendung I working area is given to PT Ephindo Mega Methana Inc. while the consortium of Deep Industries Limited and Monnet Ispat and Energy Limited was awarded the Melak Mendung II working area, in East Kalimantan. Another area in East Kalimantan, the Kutai II was given to the consortium of PT Ephindo Kutai North Inc. and PT Resources Alam Energi.

Working areas in South Sumatra are Belida by the consortium of PT Sele Raya Resources and PT Andalas Metana Energi; Lematang by the consortium of PT Medco CBM Lematang, PT Methanindo Energi Resources and PT Saka Energi Indonesia; Suban I by the consortium of PT Pertamina Hulu Energi Metana Suban I and PT Suban Energi; and Suban II by the consortium of PT Pertamina Hulu Energi Metana Suban II and PT Suban Methan Gas.

Meanwhile, Total E&P Indonesia West Papua was awarded the Southwest Bird’s Head working area in Papua.

Energy and Mineral Resources Minister Darwin Zahedy Saleh told those who signed the contracts to push for exploration activities within their working areas.

“Without maximum exploration activities, our oil and gas reserves are dwindling. I hope all contractors maximize their exploration activities and meet the schedules,” he said.

He added that the government aimed to produce electricity from CBM by the end of this year to reduce dependency on petroleum. Indonesia falls short on its oil production target this year. The government and the House of Representatives agreed to lower the oil production estimate from 970,000 barrels of oil per day (bpd) to 945,000 bpd in the 2011 Revised State Budget.

The ministry also offered eight CBM contracts for working areas in Central, East and South Kalimantan and one oil-and-gas contract in Central Kalimantan, with a minimum signature bonus of $1 million for each area. “Terms and conditions for the eight CBM contracts are: Non-share fuel first trance oil petroleum [FTP] is 10 percent; split for government and contractor after tax is 55:45; and cost recovery is 100 percent,” director general for oil and gas Evita H. Legowo said.

She said the conditions for the oil-and-gas contract were 20 percent in FTP (shareable), both oil and gas splits are 60:40.

The bid document can be acquired from Sept. 12 to Oct. 26. The document can be submitted on Oct. 27. (swd)