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EDC drops Peru exploration project

/ 01:50 AM September 07, 2012

Energy Development Corp., the country’s largest producer of geothermal energy, has dropped an exploration project in Peru, after initial assessments showed that existing resources would not be viable enough for power production.

In a disclosure to the Philippine Stock Exchange on Thursday, EDC said it “made the decision not to pursue the Chocopata project based on the results of the initial geoscientific surveys.”

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“[This] decision does not have a material effect on EDC’s existing operations and financial condition as such project was in its preliminary stage for evaluation only,” the company added.

The Chocopata geothermal exploration project in Peru was covered by EDC’s joint-venture agreement with Hot Rock Ltd. signed early this year. Under this agreement, EDC would own a 70-percent stake in the vehicle company that would supposedly pursue the project, while the remaining 30 percent would be held by Hot Rock.

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This is the third international geothermal exploration project that was dropped by EDC.

In July this year, EDC opted not to pursue two exploration projects in Chile, the Calerias and Longavi, after initial surveys showed that these were not viable.

Despite this, EDC president and COO Richard B. Tantoco said the Lopez affiliate remained keen on pursuing an international expansion.

“At this stage of the development, it is [typical] to drop some areas that are not promising or simply do not have the potential size. Our goal is to focus on a few large-scale developments, so we will continue to apply for, acquire and partner for promising concessions to develop,” Tantoco said in a text message.

EDC still has one more geothermal exploration project in Peru, covering the Quellaapacheta concession area. This area is also being explored jointly under a previous agreement with Hot Rock.

The Lopez affiliate also has three more concession areas in Chile, which it planned to pursue, namely the Newen, San Rafael and Batea geothermal exploration concession areas. These were awarded to EDC by the Chilean Ministry of Energy early this year.—Amy R. Remo

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TAGS: Energy, Energy Development Corp., Geothermal, Peru, Philippines
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