Energy Development Corp. wants to resume drilling for the Mariposa geothermal project in Chile this year, after deciding to postpone it in October, a company official said.
“We’re looking to resume drilling this year,” EDC chief finance officer Nestor Vasay said. He said the company was watching the movement of world oil prices.
EDC decided to postpone the three-well drilling campaign for the Mariposa project amid the continuing decline in world prices.
Oil prices fell because of oversupply in the US and the Organization of Petroleum Exporting Countries’ decision not to cut back production.
“In the light of the challenging project economics resulting from the recent fall in prices of competing fossil fuels, EDC has decided to postpone the three-well drilling campaign for the Mariposa project in Chile originally scheduled mid-October this year,” the company said earlier.
EDC said it continued to pursue development activities at the Mariposa project with greater focus, including conducting further environmental and technical studies for the steamfield, power plant and transmission line interconnection.
“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,” it said.
EDC is also negotiating with the Inter-American Development Bank to secure funding support under the exploration risk mitigation program administered by the bank.
The project, located in the Andes Mountains some 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,” the company said.
EDC earlier allocated P3.8 billion for its overseas geothermal exploration projects in Latin America, with bulk of the amount allocated for the Mariposa prospect.
EDC hold stakes in five concessions and 19 applications in Chile and Peru. The company acquired the local subsidiaries of Australian geothermal firm Hot Rock Ltd. and signed joint venture agreements with TSX-listed and global renewable energy player Alterra Power.
The company completed its survey activities in GrahoNyabu in Sumatra, and the results of the initiative, which EDC submitted in 2013, shall be used by the Indonesian Ministry of Energy and Mineral Resources for its upcoming tender for the GrahoNyabu concession.
EDC has also established offices in Latin America and Indonesia.
EDC, an affiliate of First Gen Corp., owns 1,441 megawatts of generating capacity of which 1,159 MW is geothermal, 150 MW is wind, 132 MW hydro and 4 MW solar.