US energy giant Chevron looks to RP for expansion

American energy giant Chevron Corporation is eyeing the Philippines, along with Indonesia, as growth areas for investments primarily for renewable energy developments.

Chevron Geothermal Philippines Holdings Inc. president and general manager Antonio F. Yee said they are keen on pursuing a proposed greenfield geothermal power project in north Luzon to help the country’s need for capacity addition.

He noted that the policy underpinnings and set of incentives under the Renewable Energy Law became their ace in enticing their principals to take a fresh look at investment opportunities – after years that the company has not really looked at greenfield developments in the country.

Chevron Geothermal’s precursor company, Unocal Corporation, was actually the first venturer in geothermal energy development in the Philippines via the 289-megawatt Tiwi project in Albay. Its next plunge was with the 458.53-MW Makiling-Banahaw geothermal projects in Batangas and Laguna provinces.
With its acquisition of the Unocal’s stake several years back, Chevron currently stands as the world’s largest geothermal producer. So far, its closest competitor when it comes to capacity installation is in the Philippines – the Lopez-controlled Energy Development Corporation.
“We are certainly looking at the Philippines as growth area for investment,” Yee said, stressing that the RE Law somehow provided a level playing field for investors eyeing to venture into new geothermal developments.

He added that project plans are on track unto prospects of advancing exploration activities on a proposed 100-megawatt geothermal power facility in Kalinga province. The proposed facility will cost $300 million.
For the corporate vehicle in the project, Chevron eyes to corner a commanding equity lead while its partner, publicly-listed APC Group Inc. through a subsidiary Aragorn Power, may take in the minority stake.
Yee explained that the Free Trade of the Americas Agreement (FTAA) which has been recognized under the provisions of the RE Law somehow provided them enough leeway in terms of deciding on higher equity take on their planned geothermal ventures.

Aragorn Power, which has a tie-up with Guidance Management Corporation (GMC), is the holder of the service contract on the geothermal project being explored by the American firm.