EDC eyes geothermal assets of Chevron

MANILA, Philippines – Energy Development Corp. (EDC) has put a bid for the geothermal assets of American energy giant Chevron Corp. in hopes to go into the Indonesian market, a ranking company official said.

The company was among the five shortlisted companies that made offers for the Philippine and Indonesian geothermal assets of Chevron on Oct. 31, EDC senior vice president and CFO Nestor Vasay said in an interview with reporters over the weekend.

He said EDC has formed a consortium with the Mitsui Group and Kyushu Electric Power Company (KEPCO) – both Japanese firms – for the said assets.

Other companies that were shortlisted include the Aboitiz Group and Japan’s Marubeni Corp. team up, the Ayala Group with its Japanese partner, and Indonesian power firm PT Medco.

“There are discussions going on by and amongst the bidders together with Chevron. We were shortlisted.

There were seven who submitted the bid but now shortlisted to five,” Vasay said.

Chevron is now evaluating the offers and is expected to give guidance to the shortlisted firms.

“They are now evaluating the bids and then [it is] expected they’ll go back to the shortlisted and then discuss some more then probably decide,” Vasay said.

Chevron is unloading its geothermal energy blocks located in Indonesia and the Philippines valued at roughly $3 billion.

In its website, Chevron Indonesia operates two geothermal projects on the island of Java – the Darajat project under Chevron Geothermal Indonesia Ltd. and the Salak project under Chevron Geothermal Salak Ltd.

The Darajat project supplies geothermal steam to a 270-megawatt (MW) plant while the Salak project supplies steam to a 377-MW, six-unit power plant.

In the Philippines, Chevron Geothermal Philippines Holdings Inc. has a 40 percent stake in Philippine Geothermal Production Co., which operates the geothermal production field that supplies the steam requirement of the Aboitiz Group’s Tiwi and MakBan plants.

EDC has been eyeing Indonesia and participating in the Chevron bid is a good opportunity to go into that market.

“We already have an office in Indonesia and its our aspiration to go international and EDC is a very good platform for us to do that,” Vasay said.

In 2015, EDC announced it is considering Indonesia as the next site for its international drilling – after Peru and Chile – with the government’s plan to auction the Graho Nyabu concession in Sumatra.

The Lopez firm, in 2013, forged a joint venture agreement with Canada-based energy company Alterra Power Corp. for geothermal projects in Chile and Peru.

However, these projects have been on hold due to “challenging economic conditions, Vasay said.

“In Chile and Peru, [projects are] on hold because of the challenging economic conditions. I guess we will always pursue this when the right opportunity comes,” he said.