Govt proposes independent study to develop CBM potential

In a bid to develop the country?s coal bed methane (CBM) potential, the government has proposed for an independent study that would review the various problems or obstacles including regulatory, investment and technical aspects, as well as the required incentives for investors.

This was said by the Director General of Gas at the Ministry of Energy and Mineral Resources Edy A. Hermantoro following the 2014 IndoCBM business forum in Jakarta on Monday.

Edy said that the independent study would review whether the incentives demanded by investors are rational, and whether there are regulations that must be revised to help lure new investment.

He said that during the forum, among of the questions raised by investors are the CBM development system in Indonesia, incentives planned by the government, land acquisition and tax issues particularly with regard to the huge land and building tax.

During the forum, the government has proposed for the application of Gross Production Sharing contract system, under which the market for the CBM gas will still be determined by the upstream oil and gas authority SKK Migas, while the selling price determined by the government.

Editing by Reiner Simanjuntak