EDC signs agreement to explore in Chile, Peru

Energy Development Corp., the country’s largest producer of geothermal energy, has signed an agreement with Canada-based Alterra Power Corp. to conduct exploration work in the latter’s geothermal concessions in Chile and Peru.

In a disclosure to the Philippine Stock Exchange Thursday, EDC said that the agreement would allow the Lopez affiliate to conduct due diligence in Alterra’s geothermal concession in Chile and five of Alterra’s geothermal authorizations in Peru.

The agreement also gives EDC the “exclusive right to conduct exploration and due diligence and has the sole option to advance the projects to joint venture stage.”

“At that point, EDC will take a 70-percent interest in the joint venture by funding such amount necessary to top up Alterra’s past development cost, ” the company added.

In a separate text message to reporters, EDC president and COO Richard B. Tantoco added that the company’s investment in the agreement with Alterra had no upfront cost or premium.

“Under the  structure we agreed on, EDC will first conduct due diligence and if we are satisfied, we will invest equity. In Chile we plan to drill one to two wells and in Peru we will do reconnaissance surveys, geophysics, geology and geochemistry work,” Tantoco explained.

EDC is currently racing against other foreign companies to build the first geothermal power plant in Chile, as it aggressively pursues efforts to boost its operations globally.

Tantoco earlier said that the company had been preparing to undertake preliminary survey work in its three geothermal exploration concession areas in Chile, namely, Newen, San Rafael and Batea, in the hope of putting up the first geothermal facility there.

The company also plans to pursue other prospective geothermal concession areas in Chile, even after it dropped the Calerias and Longavi projects as initial surveys showed that these prospects were not commercially viable.

EDC, which is acknowledged as a global leader in wet steam technology, 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 with an installed capacity of 1,130 megawatts.