Philippine Geothermal Service Contract System

The exploration and development of geothermal resources could be assigned by the Government to private parties through a GSC.

1. Who may explore and develop Geothermal Resources

   1. Government
   2. Entities at least 60% owned by Filipino citizens

2. Qualifications of Contractor

   1. Financial Criteria:

   • Working capital of not less than P20 million for the first two (2) years of the work program.
   • Additional working capital of P40 million per year for succeeding work program.

2. Technical Criteria:

• Acceptable work program.
• Competent technical personnel to carry out the work program.

 

3. Revenue Sharing Scheme:

   Contractor’s Service Fee equal to 40% of the Net Proceeds where Net Proceeds is not less than 10% of the Total Gross Value.

   Government Share equal to 60% of the Net Revenue.

4. Approval of Geothermal Service Contract

   1. Secretary of the Department of Energy

5. Areas Eligible for a Geothermal Service Contract

1. Public lands, government reservations
2. Private lands or other lands subject of agricultural, mining, petroleum or other rights or devoted to purposes other than the exploration or use of geothermal energy.

Nonexclusive Geothermal Exploration Permit (NGEP)

The Department of Energy grants the Nonexclusive Geothermal Exploration Permit to the qualified party for the purpose of conducting geological exploration studies to delineate and identify potential geothermal resources.

1. Financial Criteria

Working capital sufficient to support the exploration program

2. Technical Criteria

Services of competent personnel to carry out the work program.

3. Terms and conditions

The permit shall have duration of 6 months
The permit shall be nonexclusive
All data and interpretations shall not be sold without prior approval of the DOE

Geothermal Service Contract (GSC) Application Requirements

Submit in three (3) sets, including annexes, the following:

I. GENERAL PARTICULARS

a. Company

b. Address and telephone number

c. Authorized Representative(s)

d. Location and map of area applied for

e. Nature of Business
(Briefly discuss primary and secondary business purposes as authorized by corporate charter. Submit as Annex “A” copy of article of incorporation duly certified by the Securities and Exchange Commission. Charters or articles of incorporation of foreign companies should be authenticated)

f. Ownership, Control and Affiliates

1. Controlling Stockholders
(List names of majority stockholders and the percentage of their holdings)
2. Company Directors and Officers
(List names of board member and company officers)
3. Parent/Subsidiary/Affiliates
(List names, address and nature of business of Parent, Subsidiary and Affiliate companies
4. Contemplated changes in corporate relationship upon conclusion of service contract with the Republic of the Philippines:

a) Subsidiary companies to be formed
b) Other changes

g. Holdings

(List separately all domestic and foreign geothermal contracts/concessions being operated by applicant)

h. Guarantees extended to applicant by government and other institutions or:

1. Performance of contract
2. Financial solvency

II. ANNEXES SUBMITTED

Annex “A” Article of Incorporation
Annex “B” Proposed Geothermal Operating Contract
Annex “C” Deviations from Model Contract
Annex “D” Audited Financial Statements
Annex “E” Unaudited Financial Statements
Annex “F” Statement of Changes in Working Capital
Annex “G” List of Technical Personnel and their respective qualifications

III. PROPOSED CONTRACT

Submit copy of proposed geothermal contract patterned after the Model Contract as Annex “B”.

a. Contract Proposal
(Indicate whether or not proposal deviated from the provision of the Model Contract. Submit as Annex “C” a comparative analysis, in tabulated form (OEA-N-GEO-4) of items in the proposal which deviate from the Model Contract. Reasons for the proposed changes should likewise be presented).
b. Terms
c. Work Program
d. Cost Recovery
e. Production Sharing

IV. FINANCIAL QUALIFICATION

Submit as Annex “D” audited financial statements for the last three (3) years. If latest audited financial statements are more than sixty (60) days old at the time of filing of application, submit an unaudited financial statement (Annex E) as of the date of filing (or dated within thirty (30) days to date of filing) and a statement of changes in working capital (Annex G between the two financial statements dates.

a. Working Capital
b. Current Ration
c. Debt/Equity Ratio
d. Capitalization

1. Authorized
2. Paid-up

e. Source of additional funding
(Indicate amount and whether equity, working capital or loan. Name of sources of short/long term financing should also be indicated. Submit adequate documentation.

V. TECHNICAL QUALIFICATION

1. List name, qualification and position of technical personnel. Submit organization chart and curriculum vitae of all technical personnel as Annex “G”.
2. Describe other company owned, equipment available for geothermal operation.
3. Describe drilling equipment owned or contracted.
4. Describe history and nature of past activities in the field of geothermal.

VI. STEAM SUPPLY EXPERIENCE (DOMESTIC AND FOREIGN)

1. Sales of geothermal energy and its by-product for the past three (3) years.
2. Sales of geothermal energy and its by-products anticipated for future years.

a. from existing sources of supply
b. from the proposed service contract area production

3. Joint arrangements with other steam suppliers

a. from existing sources of supply
b. from the proposed service contract area production

VII. CERTIFICATION

The applicant/company should certify that they:

1. Have read and understand the DOE’s guidelines for filing and processing applications for geothermal service contract;
2. The information given are true and correct. It is understood that any omissions or misinterpretation of the required information shall be sufficient cause for the rejection of this application.