EDC cancels 2 geothermal exploration projects in Chile; to pursue 2 projects in Peru
MANILA, Philippines—Energy Development Corp., the country’s biggest producer of geothermal energy, has dropped two exploration projects in Chile, after initial assessments showed that existing resources are not viable enough for power production.
The Lopez affiliate, however, is still keen on its planned international expansion as it will pursue two other geothermal exploration projects in Peru, where it is now in the process of incorporating the project company vehicles that will be handling these projects.
In a disclosure to the Philippine Stock Exchange on Monday, the EDC explained that it deployed earlier this year a full team of geothermal scientists to conduct the initial geo-scientific surveys of the Calerias and Longavi projects in Chile. These two geothermal projects are covered by EDC’s joint venture agreement with Hot Rock Ltd. signed early this year.
As a result of initial geo-scientific surveys, EDC said it decided not to pursue the two Chilean projects, noting that this decision would not have a material effect on EDC’s existing operations and financial condition because the projects were in their preliminary stages for evaluation only.
“We exercised our right to withdraw after we assessed that the sites are not commercially viable. We continue to work on our own sites in Chile as well as look for others to acquire. At these early stages of exploration, it is typical that not all sites explored are found to be commercially feasible,” EDC president Richard B. Tantoco said in a text message.
According to EDC investor relations manager Erudito S. Recio, the company has three concession areas in Chile which it will pursue.
“Also, we have a business development team in Chile looking for already-owned prospects available for possible joint venture or even acquisition in Chile. The same team will handle the developments of business opportunities in the other Latin American countries,” Recio explained.
Earlier this year, the Chilean Ministry of Energy confirmed the awarding of the Newen, San Rafael and Batea geothermal exploration concession areas all in Chile to EDC, which would exclusively explore and develop the said areas.
For its Peru prospects, meanwhile, EDC said it has been working to complete the incorporation process of the project companies that would handle the exploration and development of the Chocopata and Quellaapacheta concession areas.
EDC will own a 70 percent stake in each of the two companies while its partner, Hot Rock Ltd. will hold the remaining 30 percent interest.
EDC believes that its acquisition of geothermal concession areas in Latin America are the first steps in realizing EDC’s vision to establish a global presence and further solidify its position as the pre-eminent international leader in geothermal power development.
With over 35 years of experience in developing geothermal power projects in the Philippines, EDC now looks to leverage its technical expertise and expand its operations in the international arena.
Aside from its prospects in Chile, EDC is also looking at opportunities to develop geothermal projects in Indonesia and Kenya.
EDC, currently also the world’s largest integrated producer of geothermal power, is engaged in the exploration, development and optimization of geothermal fields, as well as the operation and maintenance of the geothermal power plants in the Philippines, which have an aggregate capacity of 1,130 megawatts.
