Chevron to sell Indonesian, Philippines geothermal assets to Star Energy Consortium

US oil giant Chevron Corp yesterday struck a deal to sell its Indonesian and Philippines geothermal assets to Star Energy Consortium, part of Philippine property-to-banking conglomerate Ayala Corp.

The two companies did not reveal the financial terms of the deal, but Reuters had earlier reported that the assets on sale were valued at about $3 billion.

"These assets deliver reliable energy to support the needs of Asia-Pacific's growing economies," said Jay Johnson, executive vice president, Upstream, Chevron.  "This sale is aligned with our strategy to maximize the value of our global upstream businesses through effective portfolio management."

In Indonesia, Chevron subsidiaries operate the Darajat and Salak geothermal fields in West Java, while in the Philippines, the subsidiaries hold a 40 per cent stake in the Philippine Geothermal Production Company, Inc., which operates the Tiwi and Mak-Ban geothermal power plants in Southern Luzon.

AC Energy Holdings Inc, part of Ayala's Indonesian and Philippine groups of companies, has signed share sale and purchase agreements with the Chevron subsidiaries comprising of Chevron Global Energy Inc, Union Oil Company of California and their affiliates.

''This acquisition is a major milestone for AC Energy as this scales up our renewable energy platform and establishes our presence in Indonesia. This is a significant step towards attaining our goal of reaching 2,000MW by 2020," said John Eric Francia, president and CEO of AC Energy.

Chevron, the largest oil producer in the US after Exxon Mobil, is restructuring by selling assets, cutting jobs and delaying drilling projects after oil prices last year fell to the lowest level in more than a decade.

Late last year it said that it plans to sell assets worth about $10 billion by 2017, in an effort to weather a global slump in energy prices.

As part of this plan, the California-based company was looking for buyers for its geothermal assets in Indonesia worth more than $2 billion, and natural gas field assets in Thailand worth around $500 million.

In October, it said that it is in talks to sell its assets in Bangladesh. (See: Chevron seeks $2 bn from sale of Bangladesh assets)