Energy Development Corp., the country’s largest producer of geothermal energy, has renewed for the fifth time its drilling contract with Lihir Gold Ltd. (LGL) of Papua New Guinea.
In a filing with the Philippine Stock Exchange, EDC said its contract with LGL, one of the leading gold producers in the region, was extended up to Dec. 31, 2012.
At present, EDC provides drilling services to LGL, which depends on geothermal energy for the power requirements of its gold mine and processing facility.
As of end-September this year, EDC’s revenue from drilling services fell by 10.7 percent to P 522.3 million, from P585.1 million a year ago.
EDC said this was due to “lower drilling days and average exchange rate.”
The revenue from drilling services represented 2.9 percent of EDC’s gross revenue of P 18.22 billion for the first three quarters of 2011.
EDC earlier reported it had opted to secure the service of globally competitive drilling service providers. Outsourcing its drilling services is a practice which the company believes is consistent with global best practices of oil, gas and geothermal companies.
The geothermal firm, however, continued to “own its fleet of drilling rigs to insulate it from global price volatility and availability issues. We will outsource services and tools as we deem appropriate,” EDC president and COO Richard B. Tantoco said.
Tantoco said the move would not have an impact on its drilling projects overseas as it was “easy to contract out” services. He even had said that outsourcing is “what all the majors do.”
EDC earlier announced that it was scouting for prospective geothermal drilling projects in countries like Chile, Kenya and Indonesia.