Indonesia seeks to develop CBM with maximum economic yield

Indonesia seeks to develop CBM with maximum economic yield

 reported by: Setiawan Liu

Jakarta, October 5, 2019/Indonesia Media – With an abundance of coalbed methane (CBM) in Indonesia, it is important to have an idea of starting the business, attracting foreign direct investment inflows for commercial development. “So far, there has not been any yield (of CBM). But we have to start, move faster to develop CBM. If there is a result, the others will follow. I am sure,” Indonesian National Energy Council (DEN)’s head of energy crisis and supervision facilitation bureau, Ediar Usman told Indonesia Media.

CBM is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in China, United States, Canada, Australia, and other countries. CBM holds great potential as a global resource because the world contains abundant reserves of this gas and – moreover – it is an environmental friendly fuel. Indonesia has conducted various studies of CBM over the last 17 years in some distinct coal basins and regions especially South Sumatera, East Kalimantan and South Kalimantan. “We really have abundant resources of CBM in Indonesia, but none of contractors have achieved maximum economic yield,” said Ediar.

Indonesia’s CBM reserves are among the largest CBM reserves in the world. Currently, the country’s reserves are estimated to be around 453 trillion cubic feet (tcf) which is equivalent to around six percent of total global CBM reserves (this estimate is an optimistic one and the scientific basis is questioned). This figure also implies that Indonesia’s CBM reserves are more than double the country’s natural gas reserves. However, Indonesia’s utilization of this energy resource remains low. “We wish to visit and conduct survey on CBM exploration in Jincheng province, of China. PT Sugico (Indonesian oil and mining company) is interested also to learn further about the success story of Jincheng’s CBM exploration,” said Ediar.

The delegates of Jincheng Municipal People’s Government, including energy bureau and industry visited Indonesia and held meeting in the secretariat of DEN in Gatot Subroto street, south Jakarta on 22nd August. The meeting was also attended by officials from Indonesian Ministry of Energy and Mineral Resources (ESDM)’s Geological Agency, Directorate General of New Renewable Energy and Energy Conservation. “They shared success stories on CBM exploration in Jincheng province. therefore, if we can visit and conduct survey, we can learn further further about the industry including the business model,” said Ediar.

Building the commercial development of CBM reservoirs as sources of natural gas in Indonesia is a milestone in the world hydrocarbon industry. A key factor which may lead to the commercial development of CBM in Indonesia is how to promise benefits to prospective investors. Besides, the Indonesian government will introduce business development scheme to attract investment. “There is less interest in CBM exploration than conventional oil and gas (exploration) in Indonesia. Meanwhile, China has achieved huge contribution to success of CBM exploration. Therefore, we really wish China will shift the resources including the technology to Indonesia. The meeting (between Indonesian Ministry of Energy and Mineral Resources, DEN and Jincheng’s Energy Bureau) reveals that China is a good example of the area of CBM industry,” said Ediar. (sl/IM)

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