Chevron to narrow bids for $3bn Asian geothermal sale

Bloomberg

China General Nuclear Power Corp., the country’s biggest nuclear power operator, has been invited to make a second-round bid for Chevron Corp.’s Asian geothermal energy assets, which could fetch $3 billion, according to people with knowledge of the matter.
Jakarta-based PT Medco Power Indonesia is considering joining a separate shortlisted consortium that includes Japanese trading house Marubeni Corp. and Philippine energy producer Aboitiz Power Corp., said the people, who asked not to be identified because the information is private. Citigroup Inc., Chevron’s adviser on the sale, will call for second-round bids later this month, the people said.
Chevron, the largest U.S. oil producer after Exxon Mobil Corp., has slashed jobs, canceled drilling projects and sought assets sales to counter a slump in energy prices. The San Ramon, California-based company is aiming to sell its main Asian geothermal holdings, which generate energy from the earth’s heat, in Indonesia and the Philippines.
Chevron’s Indonesia Salak field, one of the world’s largest geothermal operations, supplies a power plant that has 377 megawatts of total capacity, according to its website. It also has a 40 percent stake in Philippine Geothermal Production Co.

Bidding Partners
“Medco Group is considering partnering with a Japanese company and a Philippine company,” Medco Power President Director Fazil Alfitri said by phone Friday. He declined to name the potential partners. Representatives for Marubeni, Aboitiz and Citigroup declined to comment, while a representative for China General Nuclear didn’t respond to a Bloomberg inquiry. A Singapore-based spokesman for Chevron said the company doesn’t comment on market rumour or speculation concerning mergers, acquisitions, or divestitures of its assets.
Aboitiz said earlier this month that it partnered with Marubeni, while Medco said in August the Indonesian firm had submitted a bid to buy a stake in the Chevron assets. Sovereign fund China Investment Corp., Malaysia’s power producer Malakoff Corp., Japan’s Mitsubishi Corp. and Ormat Technologies Inc.were among companies that considered making offers, people familiar with the situation said in April.

Asset Sales
Chevron has said it plans to raise $5 billion to $10 billion through next year from sales including the geothermal unit and assets in Hawaii, Canada, Myanmar and South Africa.
In July, the company reported its third straight quarterly loss, the longest slump since at least 1989, according to data compiled by Bloomberg. The industry is struggling with a persistent glut of oil that’s sunk prices and forced companies to shrink drilling programs and cut spending.