Indonesia's CBM Production Remains Well Below Target

Indonesia’s plan to develop coal bed methane (CBM) looks unfeasible as current output remains substantially below target, reports Jakarta Post newspaper.

Country’s Energy and Mineral Resources Ministry’s director general for oil and gas, Edy Hermantoro, said on Monday that the country is unlikely not see a boom in CBM production next year as projected in the government’s development roadmap, adds the newspaper.

Under the development plan, the ministry aims to see production of 500 million standard cubic feet per day (mmscfd) of CBM by 2015 while data suggest CBM production currently stands at around 0.75 mmscfd.

Indonesia is estimated to have CBM reserves totaling 453 trillion cubic feet (tcf).

According to Jakarta Post, so far, 54 CBM production sharing contracts (PSC) have been signed.

Government officials told the newspaper that to boost CBM output easing of licenses is very important in addition to providing incentives. The officials pointed that among possible incentives was a proposal from CBM producers to make cost recovery obtainable before the CBM projects enter commercial production stage. 

Another idea being considered was to free CBM developers from the requirement to produce authorization for expenditure (AFE), which would streamline the bureaucratic process and accelerate development, Jakarta Post quotes Hermantoro as saying.

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