Indonesia to offer 1st CBM acreages 2006

Ministry of Energy and Mineral Resources is currently drafting regulations on coalbed methane (CBM) gas, which is expected to be completed by the end of next year, a ministry official said on Friday.

Novian Thaib, director of exploration and production at the ministry said that the government is expected to open first CBM acreage bidding early next year. He said the move is aimed to exploit Indonesia?s huge but yet untapped resources of CBM.

He did not give details but sources said that the CBM acreages would likely be offered on production sharing contract basis and would fall under the supervision of upstream oil and gas regulator BP Migas.

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 potentials are identified in Sumatra and Kalimantan Basins. CBM extraction is a method for extracting methane from a coal deposit. The methane is dissolved in subsurface water in the coal seam. To economically retrieve reserves of methane, wells are drilled into the deposit, water is pumped out, then the methane is extracted, compressed and piped to market.

Several international players such as Chevron and Anadarko Petroleum are reportedly interested to enter Indonesia?s CBM exploration. A unit of JSX-listed oil firm Medco Energi Internasional Tbk. in cooperation with the ministry had recently completed drilling of Indonesia?s first CBM well in Medco?s working area in South Sumatra. (godang)