Ayala Corp to acquire Chevron’s $3 billion geothermal assets

White crater in Ciwidey, West Java, Indonesia.

Ayala Corp (OTCMKTS:AYAAF), the Philippine property to banking conglomerate, said on Friday that two of its companies plans to acquire Chevron’s (NYSE:CVX) geothermal assets in Indonesia and the Phillippines, valued earlier this year at $3 billion.

Ayala hopes to expand its power generation business and increase its power business as well as double its megawatts to 2020, double its previous plan.

Ayala said in a statement that AC Energy Holdings Inc, have signed share sale and purchase agreements with the Chevron group composed of Chevron Global Energy Inc, Union Oil Company of California and their affiliates agreement. This will be its first investment in Indonesia’s power sector.

John Eric T. Francia, AC Energy president and the chief executive officer has described this merge as a “significant step” towards attaining the goal of reaching 2,000 megawatts by 2020.

“This acquisition is a major milestone for AC Energy as this scales up our renewable energy platform and establishes our presence in Indonesia,” he said in a statement.

In an attempt to preserve its dividend amid weak oil prices, Chevron has cut spending, jobs and sold assets. Ayala has not disclosed the acquisition price however the assets at stake have been valued at approximately $3 billion.

Chevron currently owns 40 percent of the Philippine Geothermal Production Company Inc and supplies steam to power plants with a combined capacity of around 700 MW, which operates in the Tiwi and MakBan geothermal field in Luzon.

In Indonesia, the company operates in the Salak and Darajat geothermal fields in Java, with a combined capacity of 402 MW equivalent of electricity and 235 MW of steam.

AC Energy has a 19.8 percent stake in the Indonesian group, which includes Star Energy Group Holdings Pte Ltd, Star Energy Geothermal Pte Ltd, and Electricity Generating Public Company Ltd (NYSE:AEP).

Other potential buyers included Philippine companies, Energy Development Corp (OTCMKTS:EGDCY) and Aboitiz Power Corp (OTCMKTS:ABZPF), as well as the Japanese firm Marubeni Corp (TYO:8002).