Alternative Energy Opportunity - Geothermal

Vietnam SPE Meeting February 27, 2013 Ho Chi Minh, Vietnam

Mak-Ban Field, Philippines

Salak Field, Indonesia

Mak-Ban, Philippines

Salak, Indonesia

Tiwi, Field, Philippines

1

Agenda
What is Geothermal Energy?

How Does Geothermal Energy Convert to Electricity?

Geothermal Power Industry Overview Potential Geothermal Energy in Vietnam Subsurface Comparison of Geothermal VS Oil/Gas General Guidelines of Exploration, Appraisal and Development / Produce Geothermal Energy Benefits of Geothermal Energy Environmental Considerations Conclusion
2

What is Geothermal Energy? And Its Typical Characteristics

Typical Characteristics of Conventional Geothermal Resources:

Heat source (shallow magma) Heat carrier (water and steam) Temperature (450 650F) High permeability (100-1000 mD)
Naturally fractured reservoirs

Porosity (up to 20%) Several thousand feet thick Benign fluid chemistry
Low scaling potential / Non-corrosive /Low non-

What is Geothermal Energy?

Natural heat of the earth Found in volcanic regions Requires good permeability, high temperature and benign fluid

condensable gas content (<3 wt-% in steam) Dynamic conditions at initial state
Hot deep recharge, surface discharge

Valuable energy source with low environmental impact

Special Conditions:

Super-critical fluids (Temp >705F) High salinity brines (up to 30 wt-% solids) High non-condensable gas content (up to 10 wt-%)
3

What Elements Compose a Geothermal System?

KETTLE CONCEPT The element of a Geothermal System works like boiling water in a Kettle

WATER
Sufficient to effect convection

CAP ROCK
Impermeable rock formation

HEAT SOURCE
shallow levels (<20,000 ft) in the crust in the recent (<100,000 years) past

RESERVOIR
Permeable and porous underground rocks
4

How Is Geothermal Energy Converted to Electricity?

Wells are drilled into the geothermal reservoir and the energy is produced through the wells to the surface as a flow of high temperature fluid (fluid may be brine, steam or a mixture of brine and steam) The surface facility equipment (pipelines, separators and scrubbers) is used to separate and process the fluid into steam and brine and the steam then flows to a turbine in the power plant, where the heat energy is converted to electricity The separated brine may also be used to produce additional electricity by using a binary power plant to extract additional heat All separated brine and power plant condensate are normally reinjected back into the geothermal system

Key Facilities in Geothermal Process Flow

Well

Separator

Pipeline

Scrubber

Turbine/Generator

Cooling Tower

Transmission Line
6

Industry Overview Worldwide Geothermal Power Generation

Source: Geothermal Energy Association International Market Update, 2010

Rank 1 2 3 4 5 6 7 8 9 10 11 12

Country
United States Philippines Indonesia Mexico Italy New Zealand Iceland Japan El Salvador Kenya Costa Rica Nicaragua

Installed Capacity (Mwe)

3086 1936 1197 958 843 628 575 536 204 167 166 88

Rank 13 14 15 16 17 18 19 20 21 22 23 24

Country
Russia Turkey Papua New Guinea Guatemala Portugal China France Ethiopia Germany Austria Australia Thailand

Installed Capacity (Mwe)

82 82 56 52 29 24 16 7.3 6.6 1.4 1.1 0.3
7

Total Worldwide Installed Capacity from 1950 to End of 2010 and Short Term Forecast
Source: World Geothermal Congress Update, 2010

Hottest Geothermal Regions (including Pacific Ring of Fire) and Countries with Existing Geothermal Power Projects

Russia China

Iceland Germany France Austria Azores

Tibet
Japan

USA
California, Oregon, Nevada, Utah, Hawaii

Italy
Turkey

Iran

Mexico Philippines
Thailand Hawaii El Salvador Nicaragua Costa Rica Guatemala

Guadalope

Ethiopia Kenya

Indonesia
Australia

Papua New Guinea

New Zealand Chile Argentina

Italy first country to use geothermal energy started in1904 at Larderello 1960s - Chevron began geothermal operations by pioneering the development of The Geysers, north of San Francisco, California Countries turned to geothermal during 1973 oil crisis

9 24 countries now use geothermal energy

Chevron The Worlds Leading Geothermal Energy Company

Chevron has developed 26% of the worlds operating geothermal fields

1,400 1198 Developed by Gov't 49%

1,200 Currently Operable Capacity (MW)

1,000

Current Operation and 960 Participation* 902 MW (1273 MW)

2,656 MW Developed by Chevron* 26% Developed by Other Private Co. 25%

*Includes capacity of assets developed by Chevron that have been sold.

800

600

400

200

0 PNOC-EDC
2013 Chevron

CFE
Chevron

Chevron

ENEL

Calpine

Ormat

Terra-Gen

CalEnergy

Mighty River

Contact Energy
10

*Chevron now only owns 40% of Philippine operations (Nov 12)

Other Private Company Government

Chevron Geothermal Operations

Total Installed Capacity
Albay Supplies electricity to millions of people in Philippines and Indonesia

Laguna & Batangas

West Java
11

Top Ten Geothermal Fields in the World

Field 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Geysers* Cerro Prieto Tongonan Larderello Mak-Ban* Salak* Salton Sea* Coso Darajat* Tiwi * Location USA Mexico Philippines Italy Philippines Indonesia USA USA Indonesia Philippines Type Steam Liquid Liquid Steam Liquid Liquid Liquid Liquid Steam Liquid Cap, MW 945 720 700 543 403 377 331 260 259 234

* Chevron or legacy company developed Current Operations Operated by Philippine Geothermal Production Company (PGPC), a previously wholly owned company and has become a Chevron affiliate (40%) since Nov 2012
2013 Chevron 12

Geothermal Contributes to World Energy Diversity

Geothermal energy is used to generate electricity in 24 countries, ~12,000MW & 60 million people. ~46 potential new countries have economic geothermal energy developments Five countries get more than 15% of their electricity from geothermal. The 10,000,000MWh produced annually by Chevron provides electricity for 7 million homes.
1 MWh consumes 7.9 MCF natural gas 390 kg coal 1.86 Barrels oil

MakBan and Tiwi supplied more than 40% of the power in Luzon during the early 1990s.

Chevrons geothermal production increases the amount of other commodities available to export at world market prices and reduces fuel imports:
79 BCF natural gas/yr: 3.9 MM tonnes coal/yr: 19 MM barrels oil/yr:

$510 MM @ $6.50/MCF $310 MM @ $80/tonne $1.3 BN @ $70/BBL

13

Potential for Geothermal in Vietnam

http://thinkgeoenergy.co m/archives/12152 Key regions for potential geothermal power generation are in the North West, North East, North and South Central of Vietnam Geothermal power generation has potential up to 400 MW

14

Potential for Geothermal in Vietnam

~ 300 hot streams with temperatures ranging from 30 148 degrees C.

The location of geothermal water and gas discharge in the Breccisas zone in the stream line in Quang Binh

The geothermal water exploitation borehole location in Quang Binh

A 20 MW project is to start development in Quang Ngai Province (http://thinkgeoenergy.com/archives/12152)

A 25 MW geothermal power plant is expected to be developed in Quang Tri Province. http://cleantechnica.com/2012/09/25/1st-geothermalplant-in-vietnam-gets-approved/

15

Subsurface Perspective Comparison of Geothermal VS Oil & Gas

Similarities

Differences

Produce fluids from subsurface reservoirs thru wells

Inject fluids into subsurface reservoirs Surface piping and fluid handling facilities Formation damage/scale Reservoir Engineering Concepts/Management and Production Optimization processes still applicable Subsurface risks/uncertainties Subsurface workflow/earth models & reservoir simulations

Extreme temperatures
Blind drilling Specialized surveillance techniques
Geochemistry (water, gas, steam and etc) Micro-seismic and micro-gravity data

Typical well has long production life span (renewable energy) Resource characterization challenges
No seismic & limited open-hole data
Complex depositional environment

Reservoir producing mechanisms include heat mining

Thermal recharge & thermal decline
Interaction with surrounding aquifers

Risk Factor Comparison

Much higher POS in Exploration (Surface Manifestations)

16

General Guidelines of Exploration and Appraisal Program

Surface thermal features indicate chemistry and reservoir temperature Resistivity and gravity surveys indicate depth, thickness and area Regional and local geologic studies reveal features that affect permeability distribution
EURASIAN PLATE

0
PACIFIC PLATE
EA
TR EN

2 Km

NORTH

Exploration and appraisal wells confirm resource characteristics and size Reservoir simulation is used to evaluate development alternatives and assess uncertainties

Med an

LAWESI T RENCH N. SU

NEW GUIN

S u m a

Ka lim a nta n

Sulawesi

CH

Sarimaya

EPOCH

UPPER PLEISTOCENE

I n

a tr

Iria n Ja ya
Jaka rta

SALAK

ACT IVE T RENCH VOLCANIC CENT ER

i a

Ja va
e

0
n

600 km

SUNDA

T RENCH

INDO - AUSTRALIAN PLATE

GAGAK

Kawah Perbakti Kawah Ratu

ABSOLUT E AGE

AGE DIST RIBUT ION

AWIBENGKOK RHYOLIT E

ENDUTANDESIT E CIBODAS ANDESIT E KIARABERES BASALT IC ANDESIT E GAGAK BASALT IC ANDESIT E

KIARABERES

Kawah Cibeureum

Kawah Cipamatutan
PERBAKT I BASALT IC ANDESIT E

PERBAKTI CIBODAS

SALAK VOLCANICS

LINEAMENT S PROMINENTCRAT ER RIM DRILLED LOCAT ION

FUMAROLE HOTS PRING

ENDUT

17

Development Plan/Production Facilities Typical Geothermal Power Production Schematic

POWER PLANT
Rock Muffler Scrubber
steam

Ejector

Cooling Tower

Generator

Separator
two-phase

brine

Turbine
brine

Condenser

two-phase

Binary Power Plant

Holding Pond

Production wells

Hot injection wells

Cold injection wells

18

Benefits of Using Geothermal Energy

Geothermal Energy provides clean and green

Renewable energy Basically unlimited resource per natural heat within the earth
Reliable source of power can reduce the need for imported fuels for power generation

Geothermal Energy offers clear advantages for electricity generation

Less emissions than fossil fuel-fired plants (~5% of coal)

Closed-loop production system prevents discharge of chemical pollutants and waste

Land use is small compared to other fuels (~10% of solar) Readily co-exists with natural habitat and agriculture Reliable base load of renewable power

Coal Solar Wind Geo 0 2000

Land Use (ha per 100 MW)
2012 Chevron

Coal Oil Gas Geo

4000

500

1000

CO2 Emissions (kg/MWhr)

19

Geothermal Energy provides diversity that is important to utility planners

Capacity Factor (%)

Geothermal offers higher reliability and availability than other alternatives Plants are able to easily follow system load demands

Stable costs are less sensitive to fossil fuel price changes

DOC ID 20

Geothermal Projects are being Certified to Sell Carbon Credits on the Open Market
Geothermal power projects have been able to take advantage of the Clean Development Mechanism (CDM) which is a compliance option provided by the Kyoto Protocol due to their low emissions of greenhouse gases Certified Emission Reductions (CERs) from CDM projects can then be used by companies and countries to help meet their emissions targets

Projects must be additional i.e. not business as usual

The EU set up its own Emissions Trading Scheme (ETS), which has been very active in verifying and trading in CERs from projects in developing countries

DOC ID

21

Environmental Considerations
Geothermal fluid contains complex mix of components, some of which may be harmful to the environment
Proper treatment and disposal is required

Maintain a closed loop, with injection of separated water and condensed steam Treatment of gas prior to discharge, if necessary

Producing geothermal fluid may cause ground level subsidence or changes to surface thermal features
Proper development and monitoring plans are required

Geotechnical evaluations prior to development Geological and geophysical surveys during operations
DOC ID 22

Conclusion
Geothermal is clean, renewable and reliable energy.

It offers clear advantages over other fuels for the generation of electricity
Mature technology for extracting energy and converting to electrical power compared with other renewable technologies Indigenous resource
Can substitute for imported fossil fuels or allow fossil fuels to be

exported (in Indonesia and Philippines) Chevron is the worlds leading developer and pioneer of the countrys geothermal sector. Its affirmed a long-term commitment to the host country as a partner of choice to our stakeholders in geothermal development (currently: Indonesia and Philippines). However, geothermal energy must be carefully evaluated /developed in safe manner to ensure minimum to none impact to the environmental.

DOC ID

23

Back up slides

Mak-Ban Field, Philippines

Salak Field, Indonesia

Mak-Ban, Philippines

Salak, Indonesia

Tiwi, Field, Philippines

24

How Are Geothermal Resources Located?

Surface geology and tectonic setting

Surface manifestations (if present) normally provide the initial indication that a resource is present
Relative location of features (elevation)

Chemistry of discharge fluids - provides information on

possible resource type and temperature

Geophysical techniques used to determine if anomalies are present that suggest the presence of a geothermal resource
Resistivity surveys (TDEM, MT, etc), gravity, magnetics,

etc

Drilling initial exploration wells

25

How is Geothermal Resource Explored? Geology Geochemistry Geophysics Exploration Drilling

26

Surface Manifestations of Geothermal Energy

Steaming ground

Hot pool

Mud pool

Bubbling pool
27