BPMIGAS prepares regulation on join land use for CBM
Wednesday, August 3 2011 - 03:36 AM WIB
The regulation is seen as part of the agency?s efforts to further facilitate the development of CBM in the country.
BPMIGAS' Head R. Priyono said in Jakarta on Tuesday that the regulation includes a cooperation scheme between CBM contractors and coal producers on sharing responsibilities relating to the land use or ownership tax (PBB) obligations.
?The regulation is necessary if a CBM block is located in a coal mining site operated by a certain company,? he said after a signing ceremony for several new CBM and oil and gas blocks at the Energy and Mineral Resources Ministry in Jakarta on Monday.
President Director of PT Energi Pasir Hitam Indonesia (Ephindo) Sammy Hamzah admitted that land acquisition has become the biggest challenge in developing CBM project in the country, Investor Daily reported.
Ephindo addresses this problem by offering participating interest to the mining concession holder as adopted by the company at its Kutai CBM project.
Sammy Hamzah said through such policy, CBM contractors like Ephindo will gain benefits as they would no longer deal with problems related to land acquisition.
He said at the company?s CBM project in Kutai, East Kalimantan, it cooperates with a coal mining company. ?They (coal miner) have acquired the land so we only need to build roads to access our site,? he said.
Sammy said CBM mining would make underground coal mining safer since the explosive methane gases would have been extracted. He cited several fatal coal mining accidents in China due to explosions of gas underground.
?Since we still have abundant coal reserves on the surface, we don?t need to mine underground. But when we do, we will have extracted the gas so there will be no explosions as occurred recently in China,? Sammy said.
Priyono said that so far, only VICO Indonesia that has produced CBM. Currently, the company produces 1.2 million standard cubic feet per day (mmscfd) of CBM. He estimated that the company?s production in three years could reach 40 mmscfd.
The other CBM projects are still in the process of dewatering, including the CBM project being developed by Ephindo at Sekayu block in South Sumatera, where the company has drilled two exploration wells.
As for the CBM project in Senyiur, East Kutai, Ephindo is currently in the process of preparing the working plan and budgeting. The company's CBM project which is expected to start commercial operation this year is the Sangatta project, Sammy said.
To boost the development of CBM production in Indonesia, Sammy called on the government to provide incentives to investors. He argued that investments in CBM were very large, therefore incentives were necessary.
These incentives could be in the form of: first, simplifying regulations so that contractors can move quickly in drilling wells. Secondly, providing fiscal incentives, such as tax holiday and first tranche petroleum (FTP) holiday. ?Lastly, the government should assist contractors on how to develop CBM projects with different characteristics,? said Sammy.
CBM producers, he further said, could tap gas also produced during the dewatering process to generate electricity which could be sold to the surrounding community. (*)