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Indonesia’s largest geothermal producer Chevron considers exit, Medco interested

JAKARTA ( – Just as Indonesian government is trying to boost investment in power sector including geothermal, Chevron, the parent company of Chevron Geothermal Indonesia Ltd, is reportedly considering to sell its geothermal business, including Indonesia.

On Feb 29, Bloomberg reported citing unnamed sources that Chevron Corp. is considering a sale of its geothermal assets in Asia as it seeks to counter a slump in energy markets.

The operations could fetch as much as $3 billion, said one of the people, who asked not to be named because the deliberations are private. Chevron, the largest U.S. oil producer after Exxon Mobil Corp., is working with financial advisers on the sale, though no formal process has started, and Chevron may decide to keep the assets, the people said.

In Indonesia, Chevron Geothermal Indonesia operates two geothermal power plants, namely Darajat geothermal plant in West Java operated by Chevron Geothermal Salak Ltd and Salak geothermal plant managed by Chevron Geothermal Salak Ltd.

Salak geothermal power plant has a capacity of 377 MW and Darajat geothermal plant has a capacity of 260 MW.

Chevron Geothermal currently has two major operations, with the Darajat and Salak plants. The capacity of the company’s existing geothermal plants reaches 647 megawatts (MW) in Indonesia, where total geothermal capacity reaches 1.4 gigawatts.

In 2014, Chevron Geothermal Indonesia handed over its working area in Lampung, Sumatra, called Suoh-Sekincau Lampung, to the local government, amid increasing concerns on the realization of the country’s extensive plans to tap into volcanic power. The working area was handed over as it failed to find enough steam to make the prospect area into operation.

Medco Interested

Medco Power Indonesia, a subsidiary of PT Medco Energi Internasional Tbk (MEDC) has expressed its interest to buy Chevron’s geothermal assets in Indonesia, should the company decided to offload the assets.

Medco Power President Director Fazil Erwin Alfitri was quoted by Kontan daily as saying that Chevron’s geothermal assets are “proven assets’. Medco sees that Chevron might plan to sell its geothermal assets triggered by the fall of oil price, not because of weak prospect of geothermal energy business. (*)

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