Philippines: 3 local groups eye Chevron geothermal assets

Philippines: 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.

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Ref:
http://business.inquirer.net/214514/3-local-groups-eye-chevron-geothermal-as
sets

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com