3 local groups eye Chevron geothermal assets

AT LEAST three big local conglomerates are looking at buying the domestic geothermal assets of American energy giant Chevron, which is seen unloading its Philippine and Indonesian geothermal units to focus on its core oil and gas businesses.

Ayala Corp., Lopez-led Energy Development Corp. and Aboitiz Equity Ventures are studying the geothermal assets of Chevron.

Chevron has a 40-percent interest in Philippine Geothermal Production Co. Inc. (PGPC), which develops and produces steam energy for the third-party-owned and -operated Tiwi and Mak-Ban geothermal power plants in southern Luzon with a combined generating capacity of 692 megawatts. The remaining 60 percent stake in PGPC is held by the Sy family of the SM group.

Chevron also has an interest in the Kalinga geothermal prospect area in northern Luzon.

AP Renewables, a unit of Aboitiz Power, is the operator of the southern Luzon power plants that use steam produced by PGPC using heat from the earth, which naturally makes the Aboitiz group one of the interested parties. The Aboitiz group bought the power plants from the state-owned Power Sector Assets and Liabilities Management Corp. (PSALM) in 2009.

Many other foreign and local parties are likewise interested in Chevron’s assets.

“We’re interested in geothermal and the Chevron opportunity is an attractive one,” John Eric Francia, president and CEO of AC Energy Holdings Inc., said in a text message.

“We would study any potential opportunity to expand our geothermal portfolio,” said Ramon Carandang, vice president at First Philippine Holdings, parent company of Energy Development Corp., which is the biggest producer of geothermal energy in the Philippines and the second largest in the world. “Whether we actually bid would depend on a number of factors,” he added.

Asked about the possible sale of Chevron assets in the country, AEV president Erramon Aboitiz said: “We obviously will be looking at the different opportunities that come along.”

Chevron is reportedly selling its geothermal assets in Indonesia and the Philippines with estimated value of $2.5 billion.

The sovereign fund China Investment Corp., Malakoff Corp., Marubeni Corp. of Japan, Ormat Technologies Inc. were among those reported to be interested in Chevron Corp.’s Asian geothermal assets

Chevron, the biggest US oil producer, is rationalizing operations amid a global oil price slump.

Based on earlier reports, Citigroup Inc. is advising Chevron on the geothermal asset sale.