Govt to offer attractive split for coalbed methane development

The government intends to provide an attractive split for exploration and development of coalbed methane (CBM) in Sumatra and Kalimantan, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Monday.

?A government team is currently drafting an attractive revenue split including and the fiscal term to attract investors,? Purnomo said in Palembang, adding that CBM can become an alternative solution to offset the current energy crisis in Indonesia.

Purnomo also said the government targeted that commercial stage for development of CBM should be entered before 2008.

CBM is methane gas found in the cracks of coal deposits. According to state oil and gas research center LEMIGAS, around 453 trillion cubic feet of CBM resource potential are identified in Sumatra and Kalimantan Basins.

Medco E&P Indonesia has recently completed Indonesia's first coalbed methane exploration well at its working area in South Sumatra. (godang)