(EnergyAsia, April 7 2011, Thursday) — UK major BP said it has teamed up with two local companies to sign up four new coalbed methane (CBM) production sharing contracts (PSCs) in the Barito basin of South Kalimantan in Indonesia. The four PSCs cover an area of approximately 4,800 sq km.

BP and Indonesian state energy firm Pertamina were jointly awarded the Tanjung IV CBM PSC through a direct award from the Indonesian government. Pertamina will hold a 56% participating interest in the PSC with BP the remaining 44%.

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 Indonesian government. Sugico will hold a 55% participating interest in the PSCs with BP the remaining 45%.

Bob Dudley, BP group chief executive, said:

“(These) 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.”

William Lin, BP’s President of Asia Pacific Exploration & Production, said:

“BP is very pleased to be extending our working relationship with Pertamina in the development of Indonesian CBM resources, and also to cooperate with Sugico in creating a material CBM position in a highly prospective basin. These four PSCs complement BP’s existing CBM position in Indonesia, allowing us to leverage our 30-plus years of CBM experience to deepen our portfolio in Kalimantan.”

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

BP has pioneered CBM technology with over 30 years of operating experience in the San Juan Basin, Colorado in the US. In the San Juan basin, BP produces approximately 650 million cubic feet of gas a day (gross) from approximately 1,300 company-operated wells,

VICO Indonesia is a joint-venture between BP and ENI, in which BP has a 38% interest. VICO’s oil and gas production is centred in the Sanga Sanga PSC, East Kalimantan basin with wells located in Badak, Nilam, Semberah and Mutiara fields. Most of the natural gas is delivered to PT Badak NGL’s plant at Bontang where LNG and LPG are produced and shipped.

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.