The Coal Bed Deal Brush-Off

(Beijing) – It's been anything but seamless from the start, but a downward spiral between one state-owned company and a small foreign partner has only deepened. Industry analysts say behind the contract dispute between Greka Energy International and China CBM are the government's efforts to reshuffle the coal-bed methane industry.

In the mid-1990s, China was just getting its coal bed methane development off the ground. State-owned company China United Coal Bed Methane (China CBM) was created and quickly signed partnership deals with several foreign companies. The company met with Dutch coal-bed methane developer Greka Energy International. The two inked their first deal together to explore coal bed methane in 1999. Then they hit rewind and repeat five more times, to eventually sign a total of six production sharing contracts by 2008.