The Basic Energy Corporation pulled out from several geothermal and gas service contracts (SC) in Mabini, Batangas, Mariveles, Bataan, and Mindoro because of major challenges in each project.
According to a PhilStar report, the Philippine Stock Exchange (PSE) disclosed that the energy firm submitted several notices to withdraw to the Department of Energy (DOE).
One of the projects is the Mabini Geothermal Service Contract (GSC) No. 8.
The energy department had extended the service contract term for the project up to 2021 to allow the energy firm to commit in drilling two wells during the extension period.
“Considering, however, that the budget for these two wells go beyond the contractual commitments of the company under the service contract, vis-a-vis the low potential return for this project and the long gestation period thereof, the company was constrained to withdraw from this project,” Basic Energy was quoted as saying in the report.
The company is also withdrawing from the Mariveles GSC.
The DOE had terminated the SC on February 26, 2018 due to difficulty in securing permits from the National Commission on Indigenous Peoples (NCIP), the local government units (LGUs) involved, as well as the host communities.
After its termination, Basic Energy had requested for a reconsideration, but is now being withdrawn “considering that a review of the controlled source magneto-telluric (CSMT) studies do not fully support a viable geothermal source.”
Lastly, Basic Energy is also withdrawing from its SC 53 or the Onshore Mindoro natural gas exploration project.
The firm has informed the SC 53 consortium of its withdrawal, thus, entailing the surrender of its three percent participating interest.
Basic Energy is also giving up its participation in the motion for reconsideration filed by the consortium with the DOE on the termination of this service contract due to the failure of the operator to perform its obligations under the SC.