Basic Energy Corp. submitted on Friday a notice to the Energy Department to withdraw from Mabini geothermal service contract no. 8.
Basic Energy disclosed to the Philippine Stock Exchange the department extended the Mabini service contract until 2021, provided the company commits to drill two wells during the extension period.
“Considering, however, that the budget for these two wells goes 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 said.
Basic Energy owns 100 percent of the Mabini geothermal prospect from 75 percent after Phinma Energy Corp. withdrew its 25 percent interest last year.
The Basic Energy and Phinma Energy joint venture in 2016 started drilling on the San Teodoro, Mabini, Batangas geothermal prospect.
The parties drilled the first well in GSEC no. 8 in the Calumpan Peninsula. The Mabini prospect covers 3,841 hectares with a potential to operate a 25-megawatt power plant.
The company also submitted a notice to the DOE to withdraw from Mariveles geothermal service contract no. 2013-02-042.
The department terminated the service contract on February 26, 2018, amid difficulties of Basic Energy in securing permits from the National Commission on Indigenous Peoples, the local government units involved and the host communities.
“The company requested for a reconsideration of the termination, which is now being withdrawn considering that a review of the CSMT studies does not fully support a viable geothermal resource,” it said.
Basic Energy said the withdrawal of the request for reconsideration of the earlier termination of the service contract would thus put into immediate effect the termination of the service contract.
The company also advised the consortium of service contract 53 in onshore Mindoro, a natural gas exploration project in the area, that it was pulling out from the deal.