Medco-Ephindo to get Indonesia?s first CBM right

Government will award Indonesia’s first coal-bed methane exploration acreage to a Medco-Ephindo consortium in August this year, according to a company official.

Ministry of Energy and Mineral Resources Upstream Director R. Priyono told reporters on a sideline of Indonesian Petroleum Engineers Conference in Yogjakarta Friday that the consortium would be automatically awarded the right as the area the consortium proposed was located in Medco’s oil, gas concession in South Sumatra Extension PSC. “So they automatically get the right without bidding,” he said.

The consortium JSX-listed energy firm PT Medco International Tbk and PT Energi Pasir Hitam Indonesia (Ephindo) is set to invest around US$200 million to develop a coal bed methane (CBM) in Banyuasin, South Sumatra, Ephindo’s president director and CEO Sammy Hamzah said last week.

Currently, said Priyono, some 24 companies have expressed their intentions to get CBM exploration rights all over the country. Priorities will be given to existing oil, gas or coal concession area holders to get CBM license, he said.

Priyono hinted that government might give split above 50 percent to the CBM contractors. (alex)