Int?l firms eyeing CBM venture with Medco

A number of international firms have approached Medco EP over possibility to jointly explore for coal-bed methane (CBM) at the latter?s oil, gas working areas in Sumatra and Kalimantan, a Medco official said on Wednesday.

Medco EP Senior official Pudjo Suwarno said that Japanese firms Itochu Corp and Mitsubishi Corp had asked Medco to jointly develop CBM potential at Medco?s working area in South Sumatra.

Other interested firms including US oil, gas firm Marathon Oil Corp, which is vying for Medco? Tarakan PSC area and French giant Total SA, which also eyeing Medco?s working areas in East Kalimantan.

Medco through JV with PT.Energi Pasir Hitam Indonesia is expected to be awarded Indonesia?s first CBM working area this year. The JV will explore for CBM in Musi Banyu Asin regency in South Sumatra.

Medco has also been involved in joint study with Royal Dutch/Shell to explore for CBM potential at the former?s Lematang Block in South Sumatra.

Under Indonesian regulation, CBM follows oil, gas regulation regime and the government has decided to give contractor's split of 45 percent.

Pudjo said that Medco in cooperation with Ministry of Energy?s Oil and Gas Research Body Lemigas have completed drilling 5 wells at Medco?s SSE Block onshore South Sumatra and will be the first CBM producer in 2009 with initial production of 1 MMCFD. Gas produced will be sold commercially through Medco?s existing gas pipeline, Hadi Purnomo, Head of Lemigas told reporters.

Medco EP is a unit of IDX-listed energy firm PT.Medco Energi Internasional Tbk.(godang)