Arrow Energy N.L. advises that two agreements have been signed with Indonesia’s state owned oil company Pertamina and its upstream subsidiary Pertamina EP.
These two agreements reflect an agreed joint approach to the technical evaluation and review of prospective Coal Bed Methane (CBM) blocks leading to potential joint Arrow/Pertamina application and subsequent development and production.
The first agreement is a Memorandum of Understanding covering joint co-operation throughout Indonesia and the second is a Heads of Agreement for technical and commercial evaluation of CBM development in the Production Sharing Contract (PSC), the Tanjung -1 PSC, currently held by Pertamina.
Both agreements focus on the joint technical work and cost sharing mechanisms leading up to joint application for CBM PSC’s. The Indonesian Government intends that preference for the award of CBM PSC’s will be given to the holder of the underlying oil and gas PSC - of which Pertamina has a substantial portfolio.
The Tanjung PSC is located in South Kalimantan and has an area of approximately 6,500 km2 within the eastern Barito Basin, containing Miocene age coal seams of typically sub-bituminous rank, occurring in multiple seams.
Pertamina is currently Indonesia’s second largest producer of oil and gas currently producing well over 100,000 barrels of oil per day and almost 1,000 million cubic feet of gas per day from equity interests throughout the country. The Tanjung PSC represents one of 8 main working areas of Pertamina EP who have operations in North and South Sumatra, East and West Java, South and East Kalimantan and West Papua.
Arrow is very pleased to be working closely with a company of the stature of Pertamina and looks forward to a sustainable and mutually beneficial business relationship in a country with substantial prospective CBM resources.
