Under a deal with Sugico Graha, the company will earn a 65% stake in 140,000 hectares in the South Sumatra Basin, which Arrow says is close to existing gas pipeline infrastructure and growing energy markets.
At last week’s annual general meeting, managing director Nick Davies told shareholders that Arrow was looking to secure more projects and partners in other “high-growth” Asian markets, following on from its acquisition of three coal seam methane exploration blocks in northeast India last month.
To fund this overseas expansion, Davies said the company was planning a partial listing of its international assets.
In a statement today, Arrow said the Indonesian Government was currently preparing legislation to govern the exploration and development of CSM in the country.
Expected to be released in the first quarter of next year, the regulations are expected to give first right of refusal for CSM tenements to the country’s existing and overlapping tenement holders.
Arrow pointed to a study by the Society of Petroleum Engineers, which estimates the potential CSM resource in South Sumatra alone was 183 trillion cubic feet.
Pipeline infrastructure connecting South Sumatra and the heavily populated island of Java is currently under construction.
Sugico is a privately held Indonesian company with diversified interests in mining, oil and gas, equipment supply and plant maintenance services, coal mine mouth power generation and crude palm oil.