Arrow, partners to spud S. Sumatra CBM project

Australian firm Arrow Energy Limited said on Thursday that its Tanjung Enim CBM block onshore South Sumatra is expected to start first drilling campaign in June this year.

?Planning for Tanjung Enim CBM PSC drilling continues. Core hole drilling is expected to commence in June,? the company said in its quarterly report.

State-owned coal miner PT Tambang Batubara Bukti Asam (PTBA), together with PT Pertamina EP, each has a 27.5 percent interest in the block with Arrow Energy, which is the block?s operator, having the balance.

PTBA in earlier statement said that based on its study the block has the potential of 0.8 TCF of gas. PTBA?s President Director Soekrisno told a parliamentary hearing in February 2010 that the CBM concession, which is located within PTBA?s mine concession, could produce 50 MMCFD starting 2013.

Arrow, Pertamina and PTBA had agreed to a six-well exploration program scheduled to commence in March 2010, Arrow said in October 2009.

Meanwhile, Arrow has now drilled the third of four exploration wells on the Sangatta 1 CBM PSC block in East Kalimantan .

?Initial indications are promising with good coal thicknesses and excellent gas indications,? Arrow said.

The effective ownership of the Production Sharing Contract (PSC) permit area is Arrow 24%, Ephindo 24 %, and Pertamina 52%.

Arrow and Ephindo are jointly operating the block through Sangatta West CBM Inc. a joint venture company which is owned 50/50 by Arrow and Ephindo.

The block is in the resources identification phase, while production and gas sales are expected to begin as early as next year, in line with the government?s intention to start producing CBM gas by 2011, Ephindo said in a statement in March this year.

The block is located within a relatively short distance from the Bontang LNG plant, where the CBM will be later processed into LNG., Ephindo said. (denny)