EDC closely monitoring world oil prices for drilling prospect

by Lenie Lectura - March 17, 2016
http://www.businessmirror.com.ph/edc-closely-monitoring-world-oil-prices-for-drilling-prospect/

GEOTHERMAL-energy industry pioneer Energy Development Corp. (EDC) of the Lopez group is closely monitoring oil prices in the world market, as plans to revisit an international drilling activity in Chile depends on this.

“We are looking at the prices. We have to see what the oil and gas prices are before any decision is made,” said EDC President Richard B. Tantoco, when asked if the company plans to revisit its abandoned Chile project.

In October last year, EDC announced it put off its first major international drilling activity in Chile.

Citing “challenging project economics resulting from the recent fall in price of competing fossil fuels,” EDC postponed the three well-drilling campaign for the Mariposa Project in Chile originally scheduled mid-October last year.

Crude had rallied about 50 percent over the past six weeks, amid talks among major oil producers to freeze output at January levels.

Still, EDC vowed to pursue development activities “with greater focus, including conducting further environmental and technical studies for the steamfield, power plant and transmission-line interconnection.”

EDC has set aside P3.8 billion in capital expenditure for its Mariposa project.

It said, though, that it will prioritize investing in technical studies for the front-end engineering design for the steam field, power plant and transmission-line connection, as well as proceed with the Environmental Impact Assessment for the project.

Efforts will, likewise, be undertaken to identify potential customers and test the pricing levels at which they are willing to enter into long-term power off-take agreements given today’s fossil-fuel prices.

The Mariposa project, located in the Andes Mountains approximately 300 kilometers south of Chile’s capital city of Santiago, covers two geothermal-exploitation concessions, Pellado and Laguna del Maule, the rights to which are owned by Compañía de Energía Limitada where affiliates of EDC and Canada-based Alterra Power Corp. hold 70-percent and 30-percent stakes, respectively.

“EDC continues to be committed in developing the Mariposa Project and remains optimistic on the long-term prospects of the Chilean electricity market,” it added.