PNOC-EDC to help develop Indonesia’s geothermal resources

Pertamina of Indonesia and the PNOC-Energy Development Corp. (PNOC-EDC), signed yesterday an agreement that will pave the way for a possible joint venture to develop the geothermal potentials of Indonesia.

Pertamina is the largest geothermal unit in Indonesia and its counterpart in the Philippines is the PNOC-EDC which is 100 percent-owned by state-run Philippine National Oil Co. (PNOC).

The signing of what was called a joint service agreement (JSA) resulted from a technical meeting in Jakarta last week.

Under the agreement, the two state energy firms will conduct a technical evaluation and feasibility study of three identified geothermal areas in Indonesia with an aggregate potential of as much as 1,200 megawatts (MW).

The areas that will be covered by the JSA are Tompaso in North Sulawei, Ulebelu in Lampung and Lumut-Balai in South Sumatra.

A PNOC-EDC technical team will be dispatched to Indonesia by the end of the month to start the review.

"The partnership between PNOC-EDC and Pertamina certainly strengthens the ASEAN (Association of Southeast Asian Nations) Energy Cooperation framework and cultivates the ASEAN spirit," Energy Secretary Vincent S. Perez said.

Perez said the JSA will send a good signal to investors that the Philippines can be one of the best geothermal developers in the region. "Our success in these ventures can very well put us on the radar screen of potential energy investors," he said.

The energy secretary said the agreement between the two firms was also a result of the talks between the leaders of the two nations.

"This development starts to bring to fruition the bilateral talks we had with the government of Indonesia when President Arroyo visited there last year," Perez said.

Perez, who was part of the presidential party that visited Indonesia last November, signed a memorandum of understanding with Indonesia’s Ministry of Energy and Mineral Resources for several possible joint energy-related projects.

"We identified several areas of cooperation but geothermal development is really one area wherein the Philippines can help Indonesia because we have both the experience and expertise to share," he said.

The Philippines is the world’s second largest producer of geothermal energy next to the United States and has been utilizing geothermal energy since the late 70s.

PNOC-EDC chairman and president Sergio Apostol said they expect the result of the study to be completed on the third quarter of this year.

"EDC’s commitment is to subject a business plan by September that would include the economic feasibility of the project, the exploration and development of the geothermal steam field, the construction and operation of the geothermal power plant," Apostol said.