Business Mirror
Published on Tuesday, 16 July 2013 18:06 Written by Lenie Lectura
BASIC Energy Corp. sees its investment in Indonesia will turn in hefty returns starting in the fourth quarter of this year, its top executive said on Tuesday.
Basic Energy has started drilling two of the 10 wells in Indonesia. The wells are being explored under PT Basic Energi Solusi, the foreign investment company incorporated in Indonesia that is owned by Grandway Group Ltd. (Grandway), the joint-venture company of Basic Energy and Petrosolve.
“By the last quarter of this year, we will start to see revenues from this project. There is no estimate yet as we have yet to see results of the well drilling,” said President and Chief Executive Officer Oscar L. de Venecia Jr. during yesterday’s news conference.
The company has already spent between $1 million and $1.5 million for drilling works alone.
De Venecia said there are no immediate plans to explore similar opportunities in nearby countries but “we intend to expand our presence in Indonesia in the future.”
He added that “we are expanding rather than look into other countries. Right now, we are drilling two wells there and after 90 days or so we will be able to determine just how profitable our investment there is.”
The company has set a capital expenditure of $2.5 million this year. “Our capital expenditure [capex] is being allocated for our Indonesia investment and geothermal contract in Mabini, Batangas. The capex will be financed internally,” he said.
Basic Energy’s Mabini geothermal service contract covers 32.5 square kilometers and is situated in the Calumpan Peninsula. Contract period is five years, which is subdivided into three phases. “We will start drilling sometime this year,” said de Venecia, adding that expenses for sub-phasse 1 and 2 could reach $150,000. source
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