Gov divides CBM into four working areas: Minister

The government would divide coal bed methane (CBM) as an alternative energy into four working areas - open area, oil and gas, coal and a working area included into oil and gas and coal, Bisnis Indonesia reported Tuesday.

?The development of CBM in an open area will be offered (to investors) through a regular tender or a direct offer mechanism,? Minister of Energy and Mineral Resources Purnomo Yusgiantoro told reporters in Jakarta on Monday.

He said that CBM potential in an oil and gas working area will be offered to Cooperation Contract Contractors (KKKS). However, if contractors are not interested (in developing CBM potential), the area will be declared as an open area in compliance with article 10 of the government regulation no. 35/ 2004 on the upstream oil and gas activities.

Under such circumstance, Minister of Energy and Mineral Resources can ask certain portion of the working area and set a policy on the development of CBM based on the consideration of boosting the utilization of oil and gas resources.

However, all of these will be conducted after being studied by the Upstream Oil and Gas Regulatory Body BPMIGAS. To develop CBM in a coal working area, (done by holders of KP and Coal Contract of Work ? PKP2B) Minister of Energy and Mineral Resources will coordinate with Minister of Home Affairs (Regional Administration).

He said that holders of KP and PKP2B would be given first priority to develop CBM. ?However, if they are not interested (in developing CBM), the area with CBM potential will be offered either through a regular tender or a direct offer mechanism,? Purnomo said.

As for the working area included into both oil and gas and coal, Minister of Energy and Mineral Resources will coordinate with Minister of Home Affairs (local administration).

Under such condition, he said, contractors of oil and gas and coal can set up a joint body and they will get first priority to develop CBM.

If they are not interested (in developing CBM), then the area will be offered to other companies through a regular tender or a direct offer mechanism.

Indonesia?s CBM potential is estimated to reach 453.3 trillion cubic feet/ TFC, most of which is located in South Sumatra, Central Sumatra, Barito, Kutai in Kalimantan and several areas in Sulawesi. (*)