Chevron resigns from Ciremai Geothermal project

JAKARTA. PT Chevron Geothermal Indonesia, which was earlier declared the winning bidder of the Ciremai geothermal project in West Java, has resigned from the assignment.

"According to the letter we received, Chevron has reneged on the bid. So the project will be auctioned again," Director General of New and Renewable Energy Sources and Energy Conservation Rida Mulyana said here on Friday.

Based on information acquired, Mulyana stated that Chevron backed out because the geothermal potential in the region was too less for the US-based company to operate an oil/gas industry there.

"If it had continued to establish operations, it would have been too expensive. So, in economic terms, the project was not profitable," he explained.

He added that local people also did not fully support the geothermal energy development project, which is believed would have been able to produce up to 150 MW of electricity.

Moreover, PT Chevron had not received an IUP (mining license) from the Ministry of Energy and Mineral Resources for this project, Mulyana pointed out, adding that it will be up for bidding again, along with other projects in 25 mining regions.

"In accordance with Law Number 21/2014 on geothermal energy, the procedure to bid for the project will be referred to the central government," he revealed.

The Directorate General of New and Renewable Energy Sources and Energy Conservation plans to put 25 geothermal projects in various regions up for auction. These include a project with a capacity of 165 MW in the Lawu mountain region, projects with a capacity of 110 MW each in the Arjuno Welirang mountain region, in Simbolon Samosir, and in the Ranau Lake region, and one with a capacity of 55 MW in the Gede Pangrango mountain region.

"The total capacity of electricity from the mining regions will be some 1,225 MW," he affirmed.

Furthermore, the office's Director of Geothermal Energy Tisnadi noted that investors' were quite interested in these projects.

"They are interested but have different preferences. While some prefer the projects in eastern regions, others are more interested in those in Sumatra and the rest in those in West Java," he observed.

In the first quarter of 2015, the directorate general aims to put projects in three mining regions up for bidding. Many more are expected in the next quarter, he remarked.