PNOC-EDC to expand overseas operations

PNOC-Energy Development Corp. (PNOC-EDC), the country’s top geothermal power company now majority owned by the Lopez Group, is seeking to expand its geothermal development and oil drilling operations overseas, the company’s top executive said.

PNOC-EDC president Paul Aquino said the company has tapped former Energy Undersecretary Guillermo Balce as consultant for the international operations.

He said the entry of Balce bodes well for the company’s preparations for its geothermal and drilling operations abroad.

Aquino pointed out they are now exploring at least three potential projects in Indonesia.

Indonesia has the largest geothermal energy reserve in the world, equivalent to 27,000 megawatts (mw) or 40 percent of the world’s geothermal reserve. However, its use of geothermal energy is still very low at only 800 mw, or only four percent of the total reserve of 20,000 mw.

The Indonesian government is targeting the use of geothermal energy to gradually rise by 200 mw to 1,000 mw in 2006 and to 6,000 mw by 2020.

“We’re looking at drilling consultancy or a possible joint venture with state-run PT Perusahaan Listrik Negara of Indonesia (PLN), PT Pertamina and Jambi, a province near Ache, Indonesia,” Aquino said.

Earlier, Balce had disclosed that PLN is asking PNOC-EDC to share its expertise in geothermal development projects in Manado, Sumatra and Java.

Balce said PNOC-EDC is trying to tap a portion of the targeted geothermal development in Indonesia, which would reach up to 2,000 mw by 2009.

“If we get even only a 100-mw project it would be great,” he said.

PNOC-EDC is the country’s largest provider of onshore drilling services. It maintains a highly experienced drilling division to man its complement of seven on shore drilling rigs. In 1977, it started exporting its drilling services for an oil and gas drilling contract in Indonesia.

PT Pertamina had signed a memorandum of understanding (MOU) with PNOC-EDC in 2005 for a possible joint undertaking in the Philippines and in the Sulawesi Island.

Pertamina is Indonesia ’s state enterprise for oil, natural gas and geothermal exploration and development.

In July 2002, an evaluation team conducted with Pertamina a technical and economic assessment of three potential geothermal projects in Indonesia . Two of the prospective areas, Ulubelu and Lumut Balai are located in South Sumatra, while the third geothermal prospect, Tompaso, is located in North Sulawesi.

The team conducted an extensive review of available information from Pertamina, site visits, sampling, assessment of existing infrastructure, market demand and supply analysis, review of the legal and fiscal framework and financial analysis.

Initial findings of the team based on available preliminary data show an estimated probable resource potential of 225 mw for Ulubelu, 300 mw for Tompaso and 1,050-1,500 mw for Lumut Balai.

The estimated resource potentials, however, are subject to revisions pending the availability of results from laboratory testing of water, isotope and rock samples obtained from the project areas. Market and financial analyses are encouraging and show that the development of the three project areas is highly feasible.

In mid-1996, with the slowdown of in-house and Philippine drilling activities, PNOC-EDC’s Energy Drilling Division (EDD) saw the opportunity to open its wings to overseas contracts.

To realize its vision as a global player in the drilling industry, EDD organized a marketing team composed mostly of drilling division insiders.

The primary task for the group was to identify companies with drilling projects and participate in the drilling rig tender process. After over two years of sourcing out service contracts, two PNOC-EDC drilling rigs left the country for Indonesia and Papua New Guinea to complement drilling contracts.