DoE terminates geothermal deal of Basic Energy

By Darwin G. Amojelar – April 26, 2019 at 09:15 pm

Basic Energy Corp. said the government terminated its geothermal service contract covering the East Mankayan Geothermal Project in the provinces of Benguet, Ifugao and Mountain Province.

The company said it received the geothermal contract on February 5, 2013, with a five-year pre-development phase to end on February 2018.

The company during the period conducted geological and geophysical studies to determine the potential of the geothermal resource and an information and education campaign in the affected areas.

“As the company encountered difficulties in securing clearances from the indigenous people (IPs) in the communities involved, the company requested the DoE (Department of Energy) on January 8, 2018 for a suspension of obligations, until it has addressed issues raised by the IPs,” said Basic.

“After more than 15  months, the DoE finally acted on the company’s request for suspension of obligations ruling that the non-completion of the pre-development phase of the project was not due to force majeure and terminated the service contract retroactive February 8, 2018,” it added.

Basic also received from the DoE a letter denying the request for a moratorium on another geothermal contract covering the West Bulusan Geothermal Project. The company sought the request as early as October 26, 2016 due to the strong opposition of the local communities and the diocese of Sorsogon.

The DoE did not consider the situation as a force majeure and terminated the contract effective October 19, 2018.

Basic appealed the termination with the DoE.

Earlier, Basic completed the acquisition of a 15-percent stake in VTE International Co. Ltd. (Thailand), or Vinter.

Vinter and Vintage EPC Company Ltd., in which BEC has another 15-percent equity participation, are the engineering contractors of the 220-megawatt solar power plant project in Minbu, Magway Region, Myanmar.