Arrow, Medco seal S. Sumatra CBM JV deal

Australian CBM firm Arrow Energy Limited announced on Wednesday its subsidiary Arrow Energy (Indonesia) Holdings Pte Ltd. and PT Medco Energi CBM Indonesia, a subsidiary of oil and gas company PT Medco Energi Internasional Tbk have signed a Heads of Agreement to jointly explore for and develop coal bed methane over Medco?s 1,889 square kilometer conventional oil and gas PSC working area, the SSE1 Block in South Sumatra.

Each company shall have a 50% participating interest.

Under this agreement, both companies will now jointly work towards expeditiously negotiating a CBM Production Sharing Contract with the Indonesian regulatory authorities aimed at commencing exploration operations as soon as possible, it said.

?Based on the initial data available both parties expect the area to be particularly attractive for CBM development. The area already has an active conventional oil and gas producing area with existing infrastructure in place and also surrounds the Rambutan project area where the Indonesian government energy research institution Lemigas have been carrying out a trial CBM pilot project testing program?. (alex)