Govt awards five CBM contracts to investors

Ministry of Energy and Mineral Resources on Tuesday awarded five coal-bed methane (CBM) exploration blocks in Sumatra and Kalimantan to contractors, which include state oil and gas company PT Pertamina, state coal mining firm PT Tambang Batubara Bukit Asam and Australian CBM developer Arrow Energy Limited.

Tanjung Enim CBM area in South Sumatra was awarded to the consortium of PT Pertamina Hulu Energi Metra Enim, PT Bukit Asam Metana Enim, Arrow Energy (Tanjung Enim); Ogan Komering II CBM area in South Sumatra to PT East Ogan Methane; Barito Tapin CBM area in South Sumatra to PT Trisakti Gas Methane; Kotabu CBM area to PT Satui Basin Gas and Pulang Pisau CBM area in Central Kalimantan to PT Sigma Energy Bumi-Blue Tiger Cp., Ltd consortium.

Under the production sharing contracts, the contractors have to deliver 55 percent of their future output to the government and keep the remaining 45 percent for themselves. They also have to deliver 10 percent of their first output to be shared by the government and contractors under the so-called ?first tranche petroleum? (FTP) principle, while their cost recovery is set at 90 percent of their annual gross revenue at maximum.

The five investors are committed to drill 18 wells for general study, 24 wells for core hole drilling program, and seven production test wells in the first pilot project. They will invest a total of US$37.97 million and give a total signature bonus of $5 million to the government.(Godang)