East Kalimantan has 105 TCF CBM

Coal Bed Methane (CBM) is a new alternative energy source, also in gas-rich Indonesia. According to Dr. Evita Legowo, Director-General Oil and Gas at Indonesian Ministry for Energy and Mineral Resources, the Indonesian government is now looking on implementing of further incentives for companies that develop CBM projects in the country, all in a drive to attract more investment into the sector. The incentive scheme being explored will include a tax facility system in which every oil and gas activity in the country is exempted from import duties for exploration equipments, and value-added tax.

In order to push CBM development, Dr. Legowo explained, the Government has prepared some incentives. Among such are by giving an interesting production sharing for investors, which is 55% for the Government and 45% for the investor. It is the biggest CBM production sharing compares with oil and gas. For petroleum, the production sharing composition is 85% for the Government and 15% for the investor. As for gas, the share is 70% for the Government and 30% for the investor. Evita said that besides production sharing, we are also discussing tax dispensation as another incentive.

Indonesia`s CBM potential is quite large (second worldś largest after China); around 453 TCF, spread in the areas, especially Southern Sumatera and East Kalimantan. For the details: North Sumatera for 52,50 TCF, Ombilin 0,50 TCF, South Sumatera 183 TCF, Bengkulu 3,60 TCF, Jatibarang 0,80 TCF, Kutei 80,40 TCF, Barito 101,60 TCF, Pasir dan Asem-Asem 3 TCF, Tarakan Utara 17,50 TCF, Berau 8,40 TCF and Sulawesi 2 TCF.

East Kalimantan in total has 105 TCF, according to Advanced Resources International (2003). CBM eploration has been done by the State-Owned Pertamina together with Ephindo Sangatta West in Sangatta. Vico should have been also doing eploration in Badak, East Kalimantan. Pertamina has been operational in CBM Sangatta 1, 2, 3, 4 and CBM Tarakan, Bunyu, and also CBM SImanggaris. Benua Etam has also attracted some investors.

In East Kalimantan, Dart Energy Ltd is a partner company of Pertamina. Dart owns 24% interest in Sangatta West CBM block, 50km north of the Bontang LNG facility. The company become joint operator with PT Ephindo (24%) through its JV, Sangatta West CBM Inc. The other 52% interest is held by Pertamina.

Pupuk Kaltim, one of the 5 state-owned fertilizer producers under Pupuk Sriwidjaja Holding has shown interests in CBM supply as well as Badak NGL. Both companies are in Bontang.