Katadata: Medco Postpones CBM Project Development in Sekayu Block

Plummeting global oil prices have hit the unconventional oil and gas sector hard. Many of the non-conventional oil and gas projects have been delayed as a result. One project that has been put on hold is the coal bed methane (CBM) project development in the Sekayu Block, which is operated by Medco Energy International. 

Medco’s President Director Hilmi Panigoro said that the company had stopped its exploration activity in the Sekayu Block in 2015. The firm says that the South Sumatran block development is no longer financially viable while global oil prices remain low. “Also, the terms that the government is offering for the CBM project are no longer attractive, especially amid the current slump in global oil prices,” Hilmi told Katadata, Monday.

Medco plans to resume the project when global oil prices rise to at least US$ 60 a barrel. Currently, the Brent oil price for the shipment in June is US$ 40.58 per barrel, while the West Texas Intermediate (WTI) price is US$ 38.13 per barrel. MORE