Bidders line-up for Chevron geothermal assets

French power and gas group Engie and Japan's Marubeni have plans to bid for Chevron Corp's Asian geothermal energy blocks located in Indonesia and Philippines.

The assets have a value estimated at US$3 billion. Chevron Corp. has hired Citigroup as its adviser for the sale, which was launched last month. Interested parties would submit their bids during April.

In Indonesia, Chevron operates the Darajat and Salak fields, which have a combined operating capacity of 647 megawatts.

Chevron also has a 40 percent interest in the Philippine Geothermal Production Company, Inc., the operator of the Tiwi geothermal facility in Albay Province and the Mak-Ban geothermal facility in Laguna and Batangas provinces. These fields provide steam to the third-party Tiwi and Mak-Ban geothermal power plants in southern Luzon. These plants have a combined generating capacity of 692 megawatts.

According to sources, one banker involved in the process stated:

"There's a lot of jostling going on to see who's teaming up with whom. I expect to see companies forming consortiums for this big sale. The Japanese are key as whoever ties up with them would have access to low cost funding and that boosts their chances." 

Consultancy Wood Mackenzie's principal power analyst Bikal Pokharel, commented:

"For global players, it provides an entry into the geothermal markets in Indonesia and possibility of further expansion."