KUALA LUMPUR (Aug 26): The Bontang Bengalon production sharing contract (BB PSC), held by Globaltech Formation Bhd's subsidiary Nu Energy Gas Ltd, has been terminated by Indonesian authorities on grounds of non-discovery of coal bed methane after six years.

This comes after Nu Energy submitted a proposal to Indonesia's Minister of Energy and Mineral Resources for a contract amendment, according to the firm's statement filed with Bursa Malaysia by Globaltec.

In the proposal, NuEnergy sought an extension of the exploration period and to continue with further exploration programme development through the Indonesian Special Task Force for upstream oil and gas business activities, or commonly referred to as SKK Migas.

"The BB PSC was terminated on the grounds of non-discovery of coal bed methane at the end of the sixth contract year and the company (NuEnergy) is required to relinquish the remaining contract area and to fulfil its remaining obligation under the PSC.

"The BB PSC has a net carrying value of US$797,868 and there will be no operational impact to the company after the termination," said NuEnergy.

It added that it will send a response to the notice and appeal to the government of Indonesia.

NuEnergy, listed on the Australian Securities Exchange, is a 52%-owned unit of Globaltec focusing on the development of Indonesian unconventional gas assets. The company holds six PSCs across South Sumatra, Central Sumatra and East Kalimantan.

Shares in Globaltec closed unchanged at 38 sen today for a market capitalisation of RM102.25 million.