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Indonesia awards Kalimantan CBM blocks to India's Monnet Ispat, local firm

https://www.chemnet.com   Jul 15,2011 Platts
The Indonesian government has awarded local company Ephindo Energy and a consortium comprising India's Monnet Ispat & Energy exploration and development rights for two coalbed methane blocks in Kalimantan, a senior government official said Thursday.

The companies have committed to a signature bonus totaling $3.26 million and spending a combined $20.34 million over a three-year exploration period, oil and gas director general at the energy and mines ministry Evita Herawati Legowo said.

The consortium comprising Monnet Ispat & Energy and local company Deep Industries was awarded the Melak Mendung I block. They are committed to spending $12.385 million and drilling 10 wells during the exploration period, on top of the $1.51 million signature bonus, Legowo said.

Ephindo Energy was awarded the Melak Mendung III block. It will give $1.750 million as signature bonus, and spend $7.950 million and drill one well in the three-year exploration period, she said.

This is the first time the government invited bids for its CBM blocks via a tender, she said. Previously, the CBM blocks were offered directly and interested companies would submit a proposal.

"We expect to sign similar CBM contracts on July 25," Legowo added. In the latest round, the Indonesian government had offered a total of seven CBM blocks in Sumatra and Kalimantan earlier this year, but was only able to award the Melak Mendung I and III blocks so far. Of the seven blocks one failed to draw any interest from investors while the remaining four were not awarded as the investors did not meet government requirements, Legowo said.

Indonesia is trying to increase its oil and gas output by offering new oil and gas blocks to investors. It is also offering CBM blocks as it explores alternative energy sources to reduce its oil dependency. Indonesia has 453 Tcf of CBM resources.

The government awarded a total of 32 CBM blocks over 2008-2011, which generated $213.37 million of investment and $41.8 million of signature bonuses.

Indonesia targets to sign another seven CBM blocks this year, Legowo added.

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