CBM Asia begins new joint study in Riau

By Demas Simbolon

CBM Asia Development Corp said that it has received formal notification from the Indonesian Directorate General of Oil and Gas to begin a joint study of the 1,382 km2 CBM Block in Riau area.

Under the joint study agreement, CBM Asia and its partner PT Tranaco Utama will conduct geological studies in cooperation with an Indonesian university to determine the economic viability of potential coalbed methane within the study area. ?If the study area is deemed economically viable, CBM Asia and Tranaco will hold the right to apply for a production sharing contract (PSC) for the area,? the Canada-based firm said in a statement received by Petromindo.com Tuesday.

The Riau study area is located in Central Sumatra, with its southern boundary sharing the northern boundary of CBM Asia?s 70 percent held and operated Hulu PSC. CBM Asia has signed a Heads of Agreement with Tranaco under which CBM Asia will hold an 80 percent participating interest in the Riau Area CBM Block and will be the operator. CBM Asia will pay 100 percent of the joint study costs which are estimated at US$300,000. The joint study is expected to take 4 months to complete.

CBM Asia also announced that it has made formal applications to conduct an additional three joint studies in prospective CBM areas in Sumatra and Kalimantan with a combined area of 7,704 km2. The company will make further announcements in regards to these joint studies on receipt of formal joint study approval notifications from the Directorate General of Oil and Gas.

"We are excited to begin the Riau joint study as well as formally applying for three additional joint study areas. We have made a thorough analysis of these areas and expect the joint study reports to reflect our enthusiasm," said CBM Asia''s CEO Alan T. Charuk. "These areas as well as other growth opportunities under review support our goal to acquire a potential net recoverable resource base of 10-15 Tcf."

Editing by Reiner Simanjuntak