BP Inks Four Coalbed Methane Contracts in Indonesia

By FOXBusiness

Shares of BP (NYSE:BP) ticked higher on Friday after the oil explorer said it signed four new coalbed methane [CBM] production sharing contracts in Indonesia.

The awards, which together cover an area of roughly 4,800 square kilometers, mark BP’s first CBM access in Indonesia outside its joint venture with ENI, VICO, which in late 2009 was awarded a contract near the Bontang LNG plant in East Kalimantan.

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“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,” BP CEO Bob Dudley said in a statement.

The Tanjung IV CBM PSC contract, which was jointly awarded to BP and co-owner Pertamina, is located in the Barito basin on South Kalimantan.

Under the award from the Indonesian government, BP will hold a 44% participating interest in the PSC with Pertamina holding the remaining 56%.

BP and co-owner PT Sugico Graha, meanwhile, were jointly awarded the Kapuas I, II and III CBM PSCs through a director offer from the government. Under that deal, BP will hold a 45% participating stake while its partner holds the remaining amount.

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