Indonesia looks to coalbed methane as oil, gas output dwindles

Indonesia looks to coalbed methane as oil, gas output dwindles

Jakarta (Platts)--11Apr2005


The Indonesian government is preparing to invite investors to explore deposits
of coalbed methane, natural gas found in association with coal seams, for
development as an alternative source of energy. The profit split for CBM
projects could be a more favorable 50:50, compared with the 70:30 in favor of
the government for natural gas production sharing contracts, oil minister
Purnomo Yusgiantoro told reporters in Palembang, South Sumatra, Monday. 

The government does not have the financies to explore CBM resources on its
own, Purnomo said. Indonesian resources of coalbed methane gas pegged at 450
Tcf are bigger than natural gas reserves estimated at 190 Tcf, he added. A
better profit split for the contractor was justified as CBM entails higher
exploration costs, the oil minister said. Some foreign investors had already
showed an interest in this area, including Japan's Mitsui, Purnomo said. "The
government is currently preparing the regulation regarding on CBM exploration
and development to attract investors," he added.

This story was originally published in Platts Global Alert
http://www.globalalert.platts.com

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