PetroEnergy to invest in West Africa energy venture

Publicly listed PetroEnergy Resources Corp. is investing in a foreign consortium that will drill seven production and exploration wells in Gabon, West Africa.

With the additional wells, the consortium hopes to increase the daily production at the Etame site in Gabon to 30,000 barrels of oil a day.

PetroEnergy vice president Francisco G. Delfin Jr. told reporters that the company would shell out its investment portion this year and the next through its 2.525-percent working interest in the Etame Marin Production Sharing Contract.

Of the seven wells, five will be for production and two for exploration, PetroEnergy said.

Delfin did not disclose the investment share of PetroEnergy in the drilling activities. But he did say that the foreign consortium would need to invest at least $20 million for each well, or roughly $140 million for all the planned seven wells.

“We are very pleased and excited about the Gabon operations because it provides constant revenues. Our revenue stream from Gabon provides us with funds to do more ventures in the Philippines and invest in renewable energy,” Delfin explained.

PetroEnergy, through wholly owned subsidiary PetroGreen Energy Corp., currently has a 65-percent stake in the joint venture vehicle called Maibarara Geothermal Inc., which is developing a P2.8-billion geothermal power plant in Mt. Makiling.

The 20-MW Maibarara geothermal power project is an integrated steamfield and power plant facility that is expected to be operational by late 2013.

It is the country’s newest geothermal power plant, after the 49-MW Northern Negros plant commissioned in 2007, PetroEnergy officials said.

Also, the company hopes to pursue its 50-megawatt wind farm in Nabas, Aklan.

The Nabas project, which is currently in its third year of feasibility studies, involves the construction of a wind farm that can generate additional capacity for the Visayas grid by 2014.

The final investment decision for the Nabas project, however, hinges on the issuance of the final feed-in-tariff rates by the ERC.

The feed-in tariff mechanism is among the critical considerations of renewable energy project proponents because the approved rates will determine if a power project is economically feasible and viable.

It will likewise assure developers of future cash flows since electricity end-users will be charged fixed amounts to cover production of energy from renewable sources.—Amy R. Remo