News

Chevron seeks deal conversion allowing for full ownership in projects

Alexander Richter 3 Feb 2010

The president of the Philippines, Gloria Arroyo has approved the contract conversion of Chevron Geothermal Philippines Holdings Inc., endorsed by the Department of Energy, allowing foreign investors of more than 40-percent ownership under the Renewable Energy Act.

In a news piece from the Philippines, the country’s president Gloria Macapagal Arroyo’s approval of the contract conversion of American energy firm Chevron Geothermal Philippines Holdings Inc. has been officially endorsed by the Department of Energy (DoE), anchoring it on the Financial or Technical Assistance Agreement (FTAA) that allows foreign investors of more than 40-percent ownership as adopted under the Renewable Energy Act.

The Chief Executive is the empowered authority to approve business deals that the country would be entering into within the ambit of FTAA.

Under the RE Law, geothermal resource has been re-classified for full foreign ownership, provided the developer would be able to go through the hurdles of legal and policy requirements prior to their contract’s award or conversion of existing contracts.

In an interview, Energy assistant secretary Mario Marasigan disclosed that Chevron’s contract conversion has “already been endorsed to the office of the President, but since it is under FTAA, we have to wait. But it’s practically approved.”

The foreign ownership leeway provided under the RE Law, he said, put to rests some apprehensions previously cast on the 60-40 equity limitation. Consequently, there is expectation of more investments flowing in the geothermal sector.

Back to Chevron’s contract, Marasigan explained that after the President’s approval, the energy department would need to inform Congress of the development prior to the signing of the geothermal service contract’s (GSC) conversion.”

Source: Manila Bulletin Publishing Corp.