These two agreements reflect an agreed joint approach to the technical evaluation and review of prospective CSM blocks leading to potential joint Arrow/Pertamina application and subsequent development and production, Arrow said this morning.

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 CSM development in a production sharing contract, the Tanjung PSC, currently held by Pertamina.

Both agreements focus on the joint technical work and cost sharing mechanisms leading up to joint application for CSM PSCs.

Arrow, one of Australia’s leading CSM producers, is building a portfolio of Asian interests and relationships, focusing on China, India and Indonesia.

It already has a relationship with Medco, Indonesia’s largest private sector petroleum company.

The Indonesian Government intends that preference for the award of CBM PSCs will be given to the holder of the underlying oil and gas PSC – of which Pertamina has a substantial portfolio, Arrow said.

“The Tanjung PSC is located in South Kalimantan and has an area of approximately 6500 square kilometres within the eastern Barito Basin, containing Miocene age coal seams of typically sub-bituminous rank, occurring in multiple seams,” Arrow said.

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 billion cubic feet of gas per day from equity interests throughout the country.

“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,” the company said.