Sy Group to consolidate energy units into one firm

MANILA, Philippines - APC Group Inc. expects to complete its restructuring plan this year,  setting the stage for its transformation into an entity that will possibly hold all the energy-related assets of the family of tycoon Henry Sy Sr.

Informed sources said APC, which is 46 percent owned by the Sy-led Belle Corp., is undertaking an overhaul of its operations and sees its disposal/restructuring program picking up speed this year.

“APC will finish its restructuring plan within the year. Its main goal is to concentrate in energy resource exploration and development to capitalize on the expected increase in demand for power,” the source said.

“The Sys are likely to inject its other power-related investments into APC, which will serve as its listed holding vehicle for projects in this sector,” the source added.

The Sy family which has interests in banking, property, telecommunications and water-distribution businesses, aims to build a presence in the local energy market.

The SM Group, through private firm All First Equity Holdings, is global oil giant Chevron’s partner for the latter’s geothermal power business in the Philippines.

They formed Philippine Geothermal Power Production Co. Inc., a 60-40 joint venture firm in favor of the Sys to comply with the Constitution which limits foreign equity ownership of entities engaged in the exploration of indigenous or renewable energy resources to only 40 percent.

Chevron already has two geothermal power projects - the Tiwi and Makiling-Banahaw power plants located in Albay and Laguna provinces.

The Sys, through its partnership with Chevron, is setting its sights on other geothermal development opportunities in Cebu, Bohol, Palawan, Samar, Northern Luzon primarily as Kalinga, as well as in Mindanao, to stake a bigger claim in the local renewable energy sector.

SM Investments Corp. chief finance officer Jose Sio earlier said the company aimed to harness the country’s rich geothermal resource potential in a bid to deliver a clean and sustainable source of energy in the Philippines.

Chevron is APC’s partner in a geothermal power project in Kalinga which is estimated to cost around $300 million.

The project involves the development of steam fields that can generate around 100 megawatts of new capacity, providing an additional source of clean, indigenous and reliable base load power to the Luzon grid.

As of end-December 2012, APC completed Geochemical and Geophysical surveys. Sub-Phase 3 which involves drilling of exploratory wells will commence by the third quarter of 2014.

The Department of Energy earlier said it was looking to raise geothermal energy production in the country by 2,000 MW come 2020.