BP awarded four South Kalimantan CBM blocks

By OGJ editors
HOUSTON, Apr. 1 -- BP PLC has signed four coalbed methane production-sharing contracts in the Barito basin of South Kalimantan, Indonesia.

BP said the four blocks total 4,800 sq km but did not describe the coal resource or its prospectivity. It was not clear how much of the basin BP’s blocks take up.

Public information distributed by Indonesia’s Directorate General of Oil and Gas attributes to the Barito basin a completable CBM resource of 101.6 tcf at a concentration of 16 bcf/sq mile with 28 m of coal thickness in the Warukin formation at an average depth of 915 m. The deeper Tanjung formation also contains coals.

BP and co-owner Pertamina were jointly awarded the Tanjung IV CBM PSC through a direct award from the government. Participating interests are BP 44% and Pertamina 56%.

BP and co-owner PT Sugico Graha (Sugico) were jointly awarded the Kapuas I, II, and III CBM PSCs through a direct offer from the government. Participating interests are BP 45% and Sugico 55%.

Bob Dudley, BP group chief executive, said: “Today’s agreements follow on from BP’s recent agreements to access new resources in Indonesia, China, India, and Australia. BP has significant experience and expertise in the development of unconventional gas, including coalbed methane, and we look forward to working with our partners to apply this to the potential of Indonesia’s coal resources.”

The awards mark BP’s first CBM access in Indonesia outside its VICO Indonesia joint venture with Eni, which in late 2009 was awarded the Sanga Sanga CBM PSC near the Bontang LNG plant in East Kalimantan. BP has 38% interest.

In the 2009 sale of BP’s interests and operatorship of the Offshore North West Java PSC to Pertamina, the two companies also agreed to cooperate on developing CBM in Indonesia.

PT Sugico Graha (Sugico) is an Indonesian-based mining and energy company formed in 1986. In partnership with other companies, Sugico has engaged in CBM exploration in Sumatra and Kalimantan.