Govt awards two CBM exploration blocks

Government on Thursday awarded two coal-bed methane (CBM) exploration blocks in East Kalimantan and Riau province to two related companies.

PT.Ridlatama Mining Utama was given right to explore for CBM in Bentian Besar Block in West Kutai regency, East Kalimantan. Ridlatama will get split of 55% with the remaining balance will then government.

Ridlatama Managing Director Anang Mudjiantoro told reporters that the company will cooperate with UK miner Churchill Mining plc to explore the block under 30:70 JV in favor of Churchill.

PT.Samantaka Mineral Utama, which is a sister company of Ridlatama, was awarded Indragiri Hulu in Riau province with production split of 60 percent and the remaining balance would go to the government.

Anang said Samantaka is also currently in talks with Churchill to jointly explore and develop the Indragiri Hulu block.

Anang said both companies have commitment to spend US$6.5 millions each for the next three years including drilling one well at each block.

Under the Indonesian regulation, CBM exploration and development fall under the production sharing contract regime similar to oil and gas, where government would pay for production costs prior to splitting the revenue. (godang)