Govt to award first CBM development contract next week

The government is set to award a coal-bed methane (CBM) development contract to the consortium of PT Medco Energi Internasional and PT Energi Pasir Hitam (Ephindo) next week, the first in Indonesia, a government official said.

The consortium will explore for CBM in Medco Energi?s working area in Musi Banyuasin, South Sumatra.

Director General of Oil and Gas at the Energy and Mineral Resources Ministry Luluk Sumiarso was quoted by Media Indonesia as saying in Jakarta Friday that officials from the government and Medco-Ephindo consortium would meet to discuss several points for the last time on next Monday or Tuesday.

Luluk expressed optimism that the country's first contract to develop CBM would finally be signed.

The government initially planned to award the CBM contract to the consortium in January 2008.

Luluk said last month that the consortium will receive a production split of 45 percent with government taking the balance. Under Indonesian regulation, CBM exploration and exploitation follows the oil and gas law. (*)