This new entity will officially hold the Geothermal Permit (Izin Panas Bumi - IPB) for the working area and will engage in various exploration activities, including survey work and exploration drilling.

The signing of these agreements is in accordance with the decision of the Minister of Energy and Mineral Resources, Afirin Tasrif, issued on June 12, 2023, regarding the selection of the PGE and Chevron consortium as the winning bidder for the Geothermal Working Area (WKP) in the Way Ratai region, Lampung Province.

Julfi Hadi, the CEO of PGE, stated that the consortium has been collaborating with the Directorate General of New and Renewable Energy and Energy Conservation (EBTKE) for the past few months to establish a strong legal framework and a commercially acceptable framework for all consortium parties and the government.

"In addition, this is also in line with relevant regulations," he said in an official statement on Wednesday, October 4, 2023.

Importance of strong legal and commercial frameworks

Meanwhile, according to Chevron Indonesia Country Manager Wahyu Budiarto, a strong legal and commercial framework is crucial for the implementation of various exploration and development programs in the Way Ratai WKP in the future.

Therefore, Wahyu stated that Chevron and PGE hope to discover and confirm geothermal resources, which will be developed to generate environmentally friendly electricity in accordance with the current national electricity plan.

"This consortium will also explore the use of geothermal resources, potentially establishing a center for green hydrogen or green ammonia production in western Indonesia to supply the domestic and export markets," he said.

Pertamina's Vice President of Corporate Communication, Fadjar Djoko Santoso, explained that geothermal energy development is one of Pertamina's strategic initiatives in the era of energy transition. He emphasized that this cooperation demonstrates Pertamina's ability to collaborate with global companies.

PGE and Chevron commitment amount

Previously, the Ministry of Energy and Mineral Resources (ESDM) designated the PGE and Chevron consortium as the winner of the geothermal working area (WKP) auction in Way Ratai, Lampung.

This decision was based on the exploration commitment amount submitted by the PGE and Chevron consortium, which totaled US$ 28.85 million or approximately IDR 430.6 billion.

The winner of the auction was formally announced in Ministerial Decree (Kepmen) ESDM Number 118 of 2023 on Monday, June 12. This announcement was made public on Monday, June 19, 2023, through a letter from the Directorate General of EBTKE, No. 13 of 2023.

The Way Ratai WKP covers an area of 70,710 hectares with an estimated reservoir temperature of 203 - 247 degrees Celsius. The potential geothermal electricity capacity that can be generated is up to 55 megawatts (MW) from a possible reserve of 100 MW.