Due diligence for Indon gas project to be finalized

The Philippine National Oil Co. (PNOC) expects the due diligence for the development of both the upstream and downstream gas and oil exploration project in Indonesia to be finalized by the middle of next month.

PNOC president Thelmo Y. Cunanan said a technical working group (TWG) was dispatched to Indonesia to conduct the due diligence a few weeks ago.

"The TWG is being encouraged to do further due diligence on both the upstream and downstream development of the oil and gas prospects in that country," Cunanan said. The due diligence is being conducted in cooperation with Pertamina, PNOC’s counterpart in Indonesia.

Early this month, Pertamina and the PNOC-Energy Development Corp. (PNOC-EDC) signed a joint study agreement (JSA) that paves the way for a possible joint venture project to develop the huge geothermal potential in Indonesia. PNOC-EDC is a 100-percent-owned geothermal development subsidiary of PNOC.

The JSA will allow the two state energy firms to conduct a technical evaluation and feasibility study of three identified geothermal areas in Indonesia with an aggregate potential of as much as 1,200 megawatts (MW).

The areas covered by the JSA are Tompaso in North Sulawesi, Ulebelu in Lampung and Lumut-Balai in South Sumatra.

"The partnership between PNOC-EDC and Pertamina certainly strengthens the ASEAN (Association of Southeast Asian Nation) Energy Cooperation framework and cultivates the ASEAN spirit," Energy Secretary Vincent S. Perez said.

According to Perez, the agreement will send a good signal to investors that the Philippines could be one of the best geothermal developers in the region.

The Philippines is the world’s second largest producer of geothermal energy, next to the United States and has been utilizing geothermal energy since the late 70s.

PNOC-EDC president Sergio Apostol said the tie-up with the Indonesian government would help PNOC-EDC secure its niche in the international market as a global geothermal service provider.

Indonesia has an estimated geothermal potential of about 27,000 MW but only has 78 MW of installed geothermal capacity. It is the third largest user of geothermal energy in the world next to the US and the Philippines.