Monday, January 14, 2008

Australian firm joins PetroVietnam in coal seam gas venture

Arrow Energy Ltd., the Australian company with coal seam gas exploration ventures in China, India and Indonesia, signed a contract with Vietnam Oil & Gas Group to search for the fuel in the Hanoi Basin.

Under the production sharing contract (PSC) with the company known as PetroVietnam, Arrow will get a 70 percent stake in a 2,743-square kilometer license area where it has committed to spend US$1.5 million over 12 months to drill eight wells, the Brisbane-based company said over the weekend in a statement to the Australian Stock Exchange.

Drilling will start later this year.

Vietnam is the second Asian country after India in which Arrow now holds title to exploration tenements, with talks under way in Indonesia and China to firm up initial accords.

The production of natural gas from deposits found in coal seams in the Hanoi Basin would help offset declining supplies from the conventional Tien Hai gas field in the same area for local industries that rely on the fuel.

“Arrow believes the PSC to be a technically and commercially attractive proposition,” the company said in the statement.

“The Vietnamese Department of Mines and Geology has estimated very large resources of coal within the Hanoi Basin.”

Arrow is considering bringing in a second local partner into the venture, the company said.