Govt opens bid for Sanga-sanga CBM block

Government on Tuesday opens bid for three coal-bed methane (CBM) blocks under direct offer mechanism, including a block eyed by East Kalimantan gas producer Vico Indonesia.

The blocks that are being offered are Rangat CBM area in Riau, Sanga-sanga CBM area in East Kalimantan and Kapurito CBM area in South Kalimantan.

Under the CBM direct offer mechanism, companies operate coal or oil, gas concessions that overlap with CBM block have first right to get the concessions. Rival bidders will be given 45 days to submit bids.

Vico Indonesia, which is equally owned by BP Plc and Eni Spa, has been submitting proposal acquire right to develop CBM potential within Sanga-sanga PSC area.

Vico CEO Chris Phillips said in January 2009 said the company is eyeing to unlock the CBM potential at Sanga-Sanga, which, according to Phillips, has the potential resources of 10 TCF.

Phillips said that VICO might be able to bring Sanga-Sanga CBM into production as early as 2012 to be supplied to Bontang LNG plant.

Vico is currently producing some 300 MMCFD of conventional gas from Sanga-sanga PSC. (godang/alex)