Govt to award six CBM contracts in May
Tuesday, March 10 2009 - 07:55 AM WIB
"The signing (of the contracts) will be held during the (incoming) Indonesian Petroleum Association (IPA) Conference and Exhibition," Director General of Oil and Gas Evita Legowo on Tuesday.
Evita spoke during a conference called "The 2nd CBM World" at Hotel Mulia, according to the ministry's website.
According to the website, the governments expects to award a total of 14 CBM concessions to investors througout the year. Until the end of last year, the government had awarded a total of 7 CBM concessions to investors, including Sekayu Block, Indragiri Hulu Block, Barito Banjar II Block, Bentian Besar Block, Sangatta Block and Kutai Block.
Although CBM is found in coal seams, the government regulates it like oil and gas rather than coal. The sector thus has a prodution sharing contract system, similar to those applied in the oil and gas industry.
Evita said in order to attract investors into CBM sector, the government had offered investors a 45 percent production share, higher than 15 percent for oil and 30 percent for gas.
"Aside from the higher production share, we are also considering other incentives, such as tax incentives," she said, while calling on investors to give inputs to the government on incentives they prefer.
She said the government would offer CBM blocks throught direct offer or regular tender mechanism.
"Due to some obstacles, we thus far can only carry out direct offer. But, we expect to offer the CBM blocks through regular tender," she said.
According to the ministry's data, CBM potentials in Indonesia reach 453 trillion cubic feet (TCF), spread mainly in the southern part of Sumatra and East Kalimantan. The breakdown is as follows: North Sumatra 52.50 TCF, Ombilin 0.50 TCF, South Sumatra 183 TCF, Bengkulu 3.60 TCF, Jatibarang 0.80 TCF, Kutei 80.40 TCF, Barito 101.60 TCF, Pasir and Asem-Asem 3 TCF, Tarakan Utara 17.50 TCF, Berau 8.40 TCF and Sulawesi 2 TCF. (Bodega)