New regulation gives oil firms priority over CBM
Thursday, November 13 2008 - 05:31 AM WIB
The new ministerial regulation revised the old regulation which set some barriers for the development of the country?s CBM resources.
CBM reserves are mostly found in coal mining concession areas. The development of the CBM fields is often hampered by the old regulation which required investors to get a recommendation letter from coal concession owners to develop the CBM fields
Under the new regulation, oil and gas companies which find CBM resources in their working areas do not need to get permission from the coal companies
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Thursday that although the new ministerial regulation gives priority to oil and gas firms over CBM resources in their working areas, the government would still offer the contracts to develop the CBM resources through regular tender process.
In case the tender attract other companies, the oil and gas firms should offer higher bidding prices to win the contracts, he said.
Indonesia is believed to hold about 453.3 trillion cubic feet of CBM resources, mostly found in southern and central parts of Sumatra.
Among the oil companies that are interested to develop CBM is VICO Indonesia, which is partly owned British firm BP Plc and Italian firm ENI SpA.
In May this year, VICO Indonesia Commercial Analyst Imelda Pasni said the firm had applied for a contract from the government to explore and exploit CBM resources at its Sanga-Sanga PSC in East Kalimantan.
The company estimates that the block contains some 10TCF of CBM that could be turned to production starting 2012. (Alex)