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Ayala unit to buy Chevron's geothermal assets in Philippines, Indonesia

AC Energy consortium to raise generating capacity as US group shifts focus

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A contract worker surveys pipes at a Chevron geothermal steam well in Bay, Laguna, south of the Philippine capital Manila.   © Reuters

MANILA -- Ayala Corp. and its Asian partners are set to acquire some of Asia's largest geothermal energy assets from Chevron, as the Philippine conglomerate further beefs up its energy portfolio.

AC Energy Holdings, a unit of the Philippine conglomerate, has signed share sale and purchase agreements with Chevron Global Energy, Union Oil Company of California and their affiliates for the acquisition of Chevron's geothermal assets in the Philippines and Indonesia.

"This acquisition is a major milestone for AC Energy as this scales up our renewable energy platform and establishes our presence in Indonesia," AC Energy President and Chief Executive John Eric Francia said. With the acquisition, AC Energy's total generation capacity in renewables will grow nearly ten-fold to 1,479 megawatts from 151 megawatts. Power generation from renewables accounts for 18% of its total projects currently in operation.

AC Energy aims to reach 2,000 megawatts of capacity by 2020.

The acquisition of Chevron's assets in Indonesia will be made through Star Energy Geothermal (Salak-Darajat), a joint venture company with Singapore-based Star Energy Group Holdings and Thailand's Electric Generating Public Company. Chevron operates geothermal fields in West Java which have a combined capacity of 636 megawatts of electricity.

Chevron's Philippine assets will be acquired through ACEHI-STAR Holdings, a joint venture company of AC Energy and Star Energy Group Holdings. Chevron has a 40% stake in Philippine Geothermal Production Company, which operates geothermal fields in southern Luzon with capacity totaling 692 megawatts.

Both parties did not disclose the value of the deal, but Chevron was reportedly seeking around $3 billion from the sale.

Chevron's move is the latest in a string of assets sales by major foreign companies in Indonesia's natural resources sector, as weak commodity prices have forced miners to focus on profitable assets. In June, Australian miner BHP Billiton divested its ownership in a coal joint venture to its local partner, while U.S. based Newmont Mining sold its stake in the local unit that operates a major copper and gold mine in eastern Indonesia.

Shares of Ayala Corp. shed 1.12% on Friday to close at 708 Philippine pesos. Shares of Electric Generating Public Company were flat at 194 baht on Friday.

Nikkei staff writer Wataru Suzuki in Jakarta contributed to this report.

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