UPDATE 2-BrightSource-Chevron project incurs heavy losses
* BrightSource has booked losses of $40.2 mln for project
* Cost overruns blamed on design and engineering changes (Adds filing details, background on BrightSource, byline)
LOS ANGELES, June 9 (Reuters) - Solar thermal company BrightSource Energy Inc said it had experienced "significant cost overruns" with its enhanced oil recovery project with Chevron Corp (CVX.N).
BrightSource, which filed with U.S. securities regulators for an initial public offering in April [ID:nN25219102], said in an amended filing on Thursday that it had set aside $40.2 million to account for losses since the project's inception, $29.7 million more than it originally anticipated.
The Coalinga, California, project will use BrightSource's solar thermal technology to create steam that is injected into an oil well to improve the flow of heavy oil. It is expected to start up in the second half of 2011.
In the filing, Oakland, California-based BrightSource blamed the cost overruns on design and engineering changes, weather-related delays and efforts to speed up completion of the project. Under the terms of the contract, those costs could not be passed on to Chevron, BrightSource said.
BrightSource has said previously that the contract for the Chevron EOR project was entered into at a loss so that the start-up could prove that its technology works at a commercial scale.
"We do not anticipate entering into another loss contract similar to the Chevron agreement," BrightSource said in the filing.
The company added, however, that it was in talks with Chevron regarding additional EOR projects "and other business opportunities," and said EOR represents "a significant growth opportunity" for its technology.
Chevron is an investor in BrightSource. The company's other investors include Google Inc (GOOG.O), ALSTOM (ALSO.PA), BP (BP.L), Morgan Stanley (MS.N) and VantagePoint Capital Partners, among others. (Reporting by Nichola Groom; editing by John Wallace and Maureen Bavdek)
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