Chevron considering sale of its Asian geothermal assets
Chevron geothermal power plant Tiwi, Albay, Philippines (source: flickr/sherwin_magayanes)
Alexander Richter
29 Feb 2016
Bloomberg reports today that Chevron is considering a sale of its geothermal assets in Asia, namely the Philippines and Indonesia.
The continued low oil price remains to be a large challenge for the whole oil & gas sector. With job cuts across the board at oil companies, but also with oil and gas service firms, it also starts to effect the geothermal activities of some companies.
In December, Atlas Copco announced a change in strategy related to its geothermal business, which seemed to have been a realignment of strategy towards focusing on its core business, cutting off non-core businesses such as geothermal.
So the news today, reported from Bloomberg is maybe not totally surprising. It is said that Chevron is considering a sale of its geothermal assets in Asia. Sources close to the company talk about a possible $3 billion price tag.
Chevron is currently with geothermal operations in the Philippines and Indonesia.
Chevron in Indonesia
Chevron has some major operations in Indonesia. Two Chevron subsidiaries operate geothermal projects on the island of Java. Chevron Geothermal Indonesia, Ltd., manages the Darajat project and Chevron Geothermal Salak, Ltd., operates the Salak project. The Darajat project supplies geothermal steam to a plant that generates 270 megawatts of electricity. All power from the Darajat site is sold directly to the national grid. Chevron holds a 95 percent operating interest in Darajat. Chevron owns the Salak project, one of the largest geothermal operations in the world. The field supplies steam to a six-unit power plant—three of which are company-owned—with a total operating capacity of 377 megawatts. The combined output from our Darajat and Salak geothermal operations now produces sufficient renewable energy to supply approximately 3 million homes in Indonesia. In 2014, Chevron began a geological and geophysical assessment of the South Sekincau prospect in South Sumatra. The company relinquished its 95 percent interest in the adjacent Suoh-Sekincau prospect area.
Chevron in the Philippines
Chevron has a 40 percent interest in Philippine Geothermal Production Company, Inc. (PGPC). PGPC develops and produces steam energy for the third-party-owned and -operated Tiwi and Mak-Ban geothermal power plants in southern Luzon. They have a combined generating capacity of 692 megawatts. Chevron also has an interest in the Kalinga geothermal prospect area in northern Luzon. The company continues to assess the prospect area. If successful, the steam resources could support 100 megawatts of capacity
Source: Bloomberg, Chevron – Indonesia Factsheet (pdf), Chevron – Philippines Factsheet (pdf)
