Aboitiz Group finalizing consortium to bid for Chevron assets

MANILA, Philippines - The Aboitiz Group is finalizing a consortium that will bid for the geothermal assets of American energy giant Chevron Corp. both in the Philippines and in Indonesia once auctioned within the year.

The group is very interested in those assets and is currently in talks with several potential foreign partners, including Japan’s Marubeni Corp., Aboitiz Equity Ventures Inc. (AEV) CFO Manuel Lozano said in a briefing late Wednesday.

“We believe in both the Philippines and Indonesian assets so we definitely want to participate but the final decision is not yet made as of today but hopefully soon the bidding will be completed,” he said.

“Ideally for us, we know we can have strong partners but we are also looking at domestic Indonesian partners as well so it will really depend on how much each one is willing to put in in terms of the bid,” Lozano said.

It will be the power subsidiary of AEV, Aboitiz Power Corp., or its unit, joining the consortium—which could be composed of three to four parties—that will be firmed up soon, coinciding with Chevron’s announcement of the sale.

“As far as I know, the sellers want to do it within the year so we are beholden to their timeline,” Lozano said.

The company will be taking in a significant stake in the consortium “that would not be seen as a passive minority,” the company official said.

AboitizPower has existing geothermal assets, namely the 289-MW Tiwi plants in Albay and the 458-MW MakBan facilities in Laguna and Batangas, giving it an edge in forming a consortium.

“I think its hard for us to be full majority especially in Indonesia as we don’t have much presence in Indonesia, but certainly a significant minority so we can be part of the decision making process,” Lozano said.

Earlier this year, Chevron Corp. announced it is unloading its geothermal energy blocks located in Indonesia and the Philippines valued at roughly $3 billion.

Lozano said the Philippine asset is much smaller compared with those in Indonesia which has steam fields and power plants.

In its website, Chevron Indonesia operates two geothermal projects on the island of Java—the Darajat project under Chevron Geothermal Indonesia Ltd. and the Salak project under Chevron Geothermal Salak Ltd.

The Darajat project supplies geothermal steam to a 270-megawatt (MW) plant while the Salak project supplies steam to a 377-MW, six-unit power plant.

In the Philippines, Chevron Geothermal Philippines Holdings Inc. has a 40 percent stake in Philippine Geothermal Production Co., which operates the geothermal production field that supplies the steam requirement of the Aboitiz Group’s Tiwi and MakBan plants.

 “The Philippine asset is just a steam field so they don’t own a power plant. They just own the steam of Tiwi-Makban which sells them to our Aboitiz Power Tiwi-Makban power plants,” Lozano said.