Ephindo to start CBM project exploration in June

PT Energi Pasir Hitam Indonesia (Ephindo) will start drilling two wells to find coal-bed methane (CBM) in the Sekayu Block, Musi Banyuasin, South Sumatra, with an investment of US$2.5 million, Bisnis Indonesia reported Tuesday.

Ephindo?s President Sammy Hamzah said that the company is in talks with Medco Energi on the technical aspects of the CBM project. Drilling is expected to start in the middle of this year and the company expects the project to come on stream in 20011 or 2012, according to Sammy.

Ephindo in partnership with McLaren Resources Inc's subsidiary South Sumatera Energy and Medco E&P signed a CBM contract with the government on May 27, 2008. It is the first CBM contract to be signed in Indonesia and marks the beginning of CBM industry in the country

The contract allows the consortium to explore and develop CBM resources in Musi Banyuasin, South Sumatra over a period of 30 years. The consortium has appointed Medco to operate the block.

Asian Development Bank (ADB) and MIGAS studies in 2002 estimated CBM resources in place in South Sumatera at 183 TCF. (*)