MANILA, Philippines — Listed Basic Energy Corp. has given up on several geothermal and gas service contracts (SC) amid challenges in each project.
In a disclosure to the Philippine Stock Exchange yesterday, Basic Energy said it submitted to the Department of Energy (DOE) several notices to withdraw from various SCs.
One of the projects is the Mabini Geothermal Service Contract (GSC) No. 8.
The DOE had extended the service contract term for this project up to 2021 so that Basic Energy could commit to drill two wells during the extension period.“Considering, however, that the budget for these two wells go beyond the contractual commitments of the company under the service contract, vis-a-vis the low potential return for this project and the long gestation period thereof, the company was constrained to withdraw from this project,” Basic Energy said.
The company is also withdrawing from the Mariveles GSC.
The DOE had terminated the SC on Feb. 26, 2018 due to difficulty in securing permits from the National Commission on Indigenous Peoples (NCIP), the local government units (LGUs) involved, and the host communities.
After DOE’s termination, Basic Energy had requested for a reconsideration of the termination, but is now being withdrawn “considering that a review of the CSMT (controlled source magneto-telluric) studies does not fully support a viable geothermal resource.”
Lastly, Basic Energy is withdrawing from SC 53- Onshore Mindoro, a natural gas exploration project in the area.
The company has informed the SC 53 consortium of its withdrawal, which entails the surrender of its three percent participating interest.
It is also giving up its participation in the motion for reconsideration filed by the consortium with the DOE on the termination of this service contract due to the failure of the operator to perform its obligations under the SC.