Chevron eyes more Geothermal projects

American firm Chevron, via its Filipinized corporate vehicle Philippine Geothermal Production Company, Inc. (PGPC) which is majority owned by the Sy Group, has indicated further investments in geothermal resource exploration and developments in the country.

In a statement to the media, PGPC president Antonio Yee noted that their company is encouraged to inject fresh investments following the issuance of their new service contracts (SCs) by the Department of Energy (DOE).

"With the fresh service contracts, we renew our commitment to deliver clean geothermal energy and strengthen our position to enhance the value of Tiwi and MakBan (Makiling-Banahaw) by implementing resource development projects over the next years."

PGPC has not given specific investment figures it will have for Tiwi-MakBan. The company is supplying the steam requirements for the electricity generation of the two plants owned by the Aboitiz Group.

Yee added that the "DOE executed the geothermal service contracts on April 25, 2013 for the Tiwi geothermal field in the province of Albay, and MakBan geothermal field in the provinces of Batangas and Laguna."

Effectively, the service contracts granted PGPC "the exclusive right to operate these fields for 25 years, renewable for another 15 years."

This early though, legal questions are being raised on the widely-perceived hasty decision of the DOE to grant PGPC's service contract, as such may have violated the provisions of the Philippine Constitution, primarily the maximum 50-year term for service contracts. Energy Secretary Carlos Jericho Petilla himself told media that he will have the "geothermal service contract reviewed" by the DOE's legal team.

On record, PGPC's precursor company Chevron Geothermal Philippines Holdings Inc. (which was formerly Philippine Geothermal Inc.), has already been operating the Tiwi and MakBan steamfield assets since September 1971 or about 42 years.

That was on the strength of a service contract it had with National Power Corporation (NPC), which was subsequently transferred to the Power Sector Assets and Liabilities Management Corporation.

Legal opinions rendered by previous leadership at the DOE indicated that if the spirit and letters of the Philippine Constitution will be strictly applied, the remaining term for PGPC (which is the offshoot Filipino company of Chevron Geothermal) may only be confined to several years - or around eight (8) years if 2013 is used as reference, instead of the additional 40 years under the GSC.

PGPC emphasized that it has been leaning on the "promise of support" sounded off by the energy secretary, in regard to "the permits and approvals for crucial power projects and assisting them in gaining social acceptability." Petilla, at the 10th general assembly of the National Geothermal Association of the Philippines (NGAP), noted that "the DOE is looking at setting up a bureau or an office that will concentrate on local government unit (LGU) permits and social concerns." (MMV)