CBM Asia Increases CBM Holdings in Sumatra

CBM Asia Development Corp. has signed a Letter of Intent to acquire a 70% working interest and operatorship of a 2,100-km2 coal-bed methane Production Sharing Contract (PSC) on the Sekayo block located in the South Sumatra Basin in Indonesia.

Negotiations continue with the current owner of the PSC and are expected to be completed in near future.

CBM Asia is a Canadian-based unconventional gas company with significant coal-bed methane exploration and development opportunities in Indonesia.

According to a study in 2004 by Stevens and Hadiyanto, Indonesia has one of the largest CBM resources in the world with a potential 453 trillion cubic feet in-place, more than double the country's natural gas reserves.

Since 2008 approximately 25 CBM PSCs have been granted by the Government of Indonesia, representing exploration commitments of over US$100 million during the next 3 years.  Most recently, state electric company, Perusahaan Listrik Negara (PLN), plans to build 18 CBM plants in the western part of Indonesia in an effort to bring the areas more electricity at a lower price (to read more about this, please click here).

In addition to CBM Asia, other companies active in CBM exploration in Indonesia include BP (BP’s PSC with local partners), Dart Energy (click here to read about Dart’s role in Indonesia), ENI, ExxonMobil, Medco (Medco’s activities in the Sekayo block), and TOTAL.

Source: CBM Asia