President Aquino pushes for closer geothermal ties

New Zealand companies should help expand the Philippines' geothermal energy sector, the country's president says.

Talking in Auckland this morning, President Benigno Aquino trumpeted his country's recent GDP growth surge and its drive to cut corruption as reasons for doing business there.

The Philippines has roughly 2000 megawatts of untapped geothermal energy potential, he says.

"We can maximise these available opportunities together. We've already collaborated in the past and this provides a solid foundation as we continue to work together."

Mr Aquino says the two countries already have a geothermal energy co-operation agreement, which allows information sharing and fosters private sector investment.

New Zealand expertise helped found the Philippines' geothermal and forestry industries, Land Information Minister Maurice Williamson says.

The Philippines is the world's second-largest producer of geothermal energy, behind the United States. However, it also has some of the highest electricity prices in Asia.

Mr Aquino says greater geothermal production will help the Philippines attract more manufacturing.

Drilling strategy review

Crown research institute GNS Science signed an agreement in Auckland today with Philippines company Energy Development Corporation (EDC) - the world's second-largest "integrated" geothermal company.

GNS, a geothermal consultant in many countries, will spend six months reviewing the resource viability of EDC's steamfields.

GNS Science has undertaken geothermal energy consultancy work in the Philippines for more than a decade, providing scientific services from field evaluation for new developments to operational improvements for existing fields.

"We've worked in the Philippines for many years, so this is just a continuation of our working relationship and putting some more specifics around it," GNS's communications manager John Callan says.

In a statement, EDC chief operating officer Richard Tantoco says an earlier GNS Science evaluation enabled the company to save $3 million in operating costs.

“GNS Science’s drilling strategy review will help us target our wells for greater productivity and savings.  Over the next four years we target to drill 75 new geothermal wells.  If production improves by at least 1 megawatt per well, compared to the average of the last three years, the value it will deliver will be an added $75 million-a-year in revenues.”

'Things are changing'

ExportNZ executive director Catherine Beard told NBR ONLINE there are huge opportunities for New Zealand businesses in Philippines, considering its high GDP growth, almost 100 million population, proximity to New Zealand and because it is English-speaking.

"I think what we have to do, and ExportNZ will have a role to play in it, is to communicate to companies that things are changing there.

"Because sometimes companies will dip their toe in a market and then pull out because they had a bad experience, and think that it's still the way it was.

"If you can get it to work, Asia's the place to be."

The Philippines was New Zealand's 14th largest export destination in 2011, with two-way trade that year worth $877 million.

New Zealand's exports to Philippines are dominated by dairy products, while fruit and nuts dominate trade in the other direction.

President Aquino says there is an opportunity to grow exports in both directions and exhorted New Zealand companies to try the country's electronics, home furnishings and clothing products.