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theChan Robles Virtual Law Library This page features the full text ofRepublic Act No. 387Petroleum Act of 1949
REPUBLIC
ACT NO. 387 AN
ACT TO PROMOTE THE EXPLORATION, DEVELOPMENT, EXPLOITATION, AND
UTILIZATION
OF THE PETROLEUM RESOURCES OF THE PHILIPPINES; TO ENCOURAGE THE
CONSERVATION
OF SUCH PETROLEUM RESOURCES; TO AUTHORIZE THE SECRETARY OF AGRICULTURE
AND NATURAL RESOURCES TO CREATE AN ADMINISTRATION UNIT AND A TECHNICAL
BOARD IN THE BUREAU OF MINES; TO APPROPRIATE FUNDS THEREFORE; AND FOR
OTHER
PURPOSES
CHAPTER
IGENERAL
PROVISIONS ARTICLE
1. Short Title of Act. The short title of this Act shall be
"Petroleum
Act of 1949."
ARTICLE
2. Definition of terms. When used in this Act, the following
terms
shall, unless the context otherwise indicates, have the following
respective
meanings:
(a)
"Petroleum" shall include any mineral oil, hydrocarbon gas,
bitumen,
asphalt, mineral wax, and all other similar or naturally associated
substances;
with the exception of coal, peat, bituminous shale, and/or other
stratified
mineral fuel deposits.
(b)
"Crude oil" means oil in its natural state before the same has
been
refined or otherwise treated, but excluding water and foreign
substances.
(c)
"Natural gas" means gas obtained from boreholes and wells and
consisting
primarily of hydrocarbon.
(d)
"Government" means the Government of the Philippines.
(e)
"State" means the Republic of the Philippines.
(f)
"Permittee," "concessionaire" or "contractor" means a
person
to whom a permit, concession, or contract, as the case may be, has been
granted or awarded under the provisions of this Act, his successors and
assigns.
(g)
"Person" includes a natural person, corporation, or partnership.
(h)
A "barrel" is equivalent to 158.98 liters or 42 U.S. gallons.
(i)
All measurements of distances, width, length, areas, depth and volume,
and weight shall be in the metric system.
(j)
Words in singular shall include the plural, and vice versa.
ARTICLE
3. State ownership. All natural deposits or occurrences of
petroleum
or natural gas in public and/or private lands in the Philippines,
whether
found in, on or under the surface of dry lands, creeks, rivers, lakes,
or other submerged lands within the territorial waters or on the
continental
shelf, or its analogue in an archipelago, seaward from the shores of
the
Philippines which are not within the territories of other countries,
belong
to the State, inalienably and imprescriptibly.
ARTICLE
4. Title to land. The ownership or the right to the use of
lands
for agricultural, industrial, commercial, residential, mining, or for
any
purpose other than for petroleum exploration, development or
exploitation
does not include the ownership of, nor the right to explore for,
exploit,
or utilize the petroleum or natural gas deposits in, on or under the
surface
of such land.
ARTICLE
5. Granting of petroleum rights. The right to explore for,
develop,
exploit or utilize the petroleum resources described in article three
hereof
may only be granted to duly qualified persons by means of concessions
in
accordance with the provisions of this Act. The Government, however,
reserves
the right to undertake such work either by itself or through its
instrumentalities,
or through competent persons qualified to undertake such work as
independent
contractor or contractors under a contract of service executed for the
Republic of the Philippines by the President and approved by the
Congress
of the Philippines in accordance with the provisions of article
thirteen
of this Act.
Exploration
or exploitation rights may be exclusive within certain areas; but no
exclusive
rights may be granted for refining or transportation.
ARTICLE
6. Granting of concession is discretionary with the Government.
The granting of concession under this Act is discretionary with the
Government,
except in the cases mentioned in article eleven hereof, where, upon the
fulfillment of the formalities and requirements of this Act, the
granting
thereof is obligatory upon the Government.
ARTICLE
7. Petroleum operation a public utility. Everything relating
to
the exploration for and exploitation of petroleum which may exist
naturally
or below the surface of the earth, and everything relating to the
manufacture,
refining, storage, or transportation by special methods of petroleum as
provided for in this Act, is hereby declared to be of public utility.
ARTICLE
8. Concessionaire assumes risks. Concessions referred to in
this
Act shall be granted at the complete risk of the interested party. The
Government does not guarantee the existence of petroleum or undertake,
in any case, title warranty.
ARTICLE
9. Ownership not conferred. Exploration and Exploitation
Concessions
do not confer upon the concessionaire the ownership over the petroleum
lands and petroleum deposits, but only the right to explore for,
develop,
exploit, and utilize them for the period and under the conditions
determined
by this Act.
CHAPTER
IICONCESSIONS ARTICLE
10. Kinds of concessions. Concessions may be any of the
following
kinds and have the following respective objects:
a.
Non-Exclusive Exploration Permit, which grants to the permittee the
non-exclusive
right to conduct geological or geophysical exploration on specified
areas.
b.
Exploration Concession, which grants to the concessionaire the
exclusive
right to explore for petroleum within specified areas.
c.
Exploitation Concession, which grants to the concessionaire the
exclusive
right to develop petroleum production within the specified areas.
d.
Refining Concession, which grants to the concessionaire the right to
manufacture
or refine petroleum, or to extract its derivatives.
e.
Pipe Line Concession, which grants to the concessionaire the right to
provide
and operate pipe line systems for transporting petroleum.
ARTICLE
11. Obligatory concessions. Subject to the fulfillment of the
formalities
and requirements provided for in this Act, the granting of the
following
concessions shall be obligatory upon the Government:
a.
Exploitation Concession, to the holder of an Exploration Concession,
for
such parcels as he may select for exploitation and to the holders of
Petroleum
Drilling Leases issued under the Petroleum Act Numbered Twenty-nine
hundred
and thirty-two, or of petroleum mining claims located and held under
the
Act of Congress of July first, nineteen hundred and two, which are
existing
and in force at the time of the enactment of this Act, when said
holders
shall apply to have the same governed by the provisions of this Act,
and
be given the privileges granted thereby;
b.
Refining Concession and/or Pipe Line Concession, to the holder of an
Exploitation
Concession, when the manufacturing or transportation is directly
related,
although not necessarily restricted, to the Exploitation Concession; and
c.
Refining Concession, to the holder of a Pipe Line Concession, or Pipe
Line
Concession to the holder of a Refining Concession, when the two
concessions
are directly, although not restrictively, related.
The
foregoing, however, shall not apply in the case of any concessionaire
who
is in arrears in any payments due the Government arising out of or in
connection
with any petroleum concession, lease, or mining claim, until such
arrears
have been paid, or, if in dispute, until a cash or surety bond has been
posted, sufficient to cover all arrears in dispute.
The
rights and obligations conferred by concessions which are obligatory
under
this article are to be regarded as following from the initial
concessions
which, under the provisions of this Act, include the right to receive
such
subsequent concessions.
ARTICLE
12. Designation of petroleum regions. For purposes of this
Act,
the Secretary of Agriculture and Natural Resources, after due study of
the different prospective petroleum lands of the Philippines, may
divide
them into a number of prospective petroleum regions, delimiting their
extent
and boundaries, and issuing the order and notice establishing such
regions.
ARTICLE
13. Petroleum reservation. Upon the recommendation of the
Secretary
of Agriculture and Natural Resources, the President of the Philippines
may set apart petroleum reservations, and shall, by proclamation,
declare
the establishment of such reservations and the boundaries thereof.
The
Government may explore, develop, and exploit such petroleum reservation
either by itself or through its instrumentalities, or through competent
persons under a contract of service, in accordance with article five of
this Act. Proposals by qualified persons to carry out such work for the
Government as independent contractor or contractors shall be filed with
the Director of Mines who shall forward the same with his findings and
recommendations to the Secretary of Agriculture and Natural Resources
who,
in turn, shall submit the same with his recommendations to the
President
of the Philippines. The President is hereby authorized to take such
necessary
action as he may deem proper on such proposals and for this purpose,
may
execute the necessary contract or contracts for and in behalf of the
Government.
In the event such contract is executed, the same shall be submitted to
the Congress of the Philippines for its approval.
No
petroleum reservation may be established over any areas covered by
application
for Exploration or Exploitation Concession already filed or granted. If
at any time after the establishment of a petroleum reservation, the
Secretary
of Agriculture and Natural Resources, after due investigation, should
find
it to the best interest of the Government, that any area within the
reservation
should be opened to Exploration or Exploitation Concession under the
provisions
of this Act, such area or areas may be recommended to be released from
the reservation and declared open to Exploration or Exploitation
Concession
under this Act by an executive proclamation of the President concurred
in by a joint resolution of the Congress of the Philippines.
ARTICLE
14. Free areas. All lands within the territorial limits of the
Philippines
including those submerged beneath seas, bays, lakes, rivers, lagoons,
or
the territorial waters, or on the continental shelf, or its analogue in
an archipelago, but which are not within the National Reserve Areas, or
Petroleum Reservations, or covered by valid and existing Exploration or
Exploitation Concession, or Petroleum Drilling Leases acquired under
the
Petroleum Act (Act No. 2932), or of petroleum mining claims located and
held under the Act of Congress of July first, nineteen hundred and two,
as amended, are called Free Areas and as such are open to application
for
Exploration Concession by any duly qualified person. Application for
said
areas shall be filed with the Director of Mines in accordance with the
provisions of article twenty-eight of this Act.
ARTICLE
15. National Reserve Areas. Areas which have been included in
any
Exploration or Exploitation Concession but which have been subsequently
given up by the concessionaire voluntarily or in accordance with the
requirement
of articles fifty and fifty-three of this Act; or areas covered by
Exploration
or Exploitation Concession which have expired or have been canceled; or
areas which have been included within any of the two kinds of
concession
but which are found to be in excess the maximum areas allowed by this
Act
for such concessions, are called National Reserve Areas, and as such
may
be applied either for Exploration or Exploitation Concession by duly
qualified
persons only after the Secretary of Agriculture and Natural Resources
shall
have first announced by means of notices published in the Official
Gazette
and in one daily English newspaper of general circulation published in
the City of Manila, at least once a month for three consecutive months,
that said lands duly described are ready for disposition and that
application
therefore may be filed within a certain date fixed in the notice.
Application
for such areas shall be filed with the Director of Mines in accordance
with article twenty-eight of this Act, and the concession may be
granted
by the Secretary of Agriculture and Natural Resources in favor of the
applicant
whose offer shall be found best to serve the interest of the Government.
ARTICLE
16. Lands covered by concessions are subject to public easements. All
lands covered by concessions granted under this Act shall be subject to
public easements established or recognized by existing or future laws.
ARTICLE
17. Operations of concessionaire subject to existing mining rights.
The operations of the concessionaire under the provisions of this Act
shall
be subject to existing mining rights, grants, permits, leases, and
concessions
in respect of substances other than petroleum and to existing petroleum
rights, grants, leases, or concessions.
ARTICLE
18. Right of Government to establish reservations or grant rights.
Concessions granted under this Act are subject to the right of the
Government
to establish reservations other than petroleum reservations, to grant
mining
rights, permits, leases, and concessions in respect of substances other
than petroleum, and to grant rights other than mining rights in, on, or
under any of the lands covered by the concession granted under this
Act,
provided that the rights of the petroleum concessionaire to search,
prospect,
and drill for, produce, extract, transport, store, process, and treat
petroleum
on, under, and from, said lands, and the other rights granted to him
under
this Act are not impaired or unreasonably interfered with.
ARTICLE
19. Additional benefits to the Government in certain cases. In
the
disposition of the National Reserve Areas and in case of conflicts of
applications
for concessions, the Secretary of Agriculture and Natural Resources may
require additional benefits to the Government over and above the
minimum
requirements provided for in this Act. These additional benefits may
include,
but shall not be restricted to, bonuses or cash payments made singly or
on installments over a period of time; or increased royalty on the
quantity
of oil produced; or undertakings in addition to those required by law
for
the promotion of education, public health, social welfare and
amelioration,
and other public services; or increased work obligations on the
concession.
ARTICLE
20. Right to enter private land. Exploration and exploitation
concessionaires
are granted the right to enter upon private lands covered by their
concessions
for the purpose of conducting geological or geophysical studies, with
the
right to use all instruments and apparatus necessary to carry out such
studies, subject to the obligations to indemnify the owner or legal
occupant
of the land for all material damage suffered by the property, its
annexes
or appurtenances as a result of such studies, provided that in no case
shall the occupancy of private buildings, yards or gardens be
authorized
against the will of their owner.
In
the event that the right granted in this article shall be denied by the
owner of the private land or by its legal occupant, the concessionaire
may apply for and, upon posting such bond as may be fixed and approved
by the Court of First Instance of the province where the land is
situated,
the court shall issue an order allowing such right pending the final
determination
of the proper amount that shall be paid by the concessionaire to the
landowner
or legal occupant. chan robles virtual law library
ARTICLE
21. Easements over private land. When easements of temporary
occupancy
over private lands are needed by a concessionaire for the purpose of
carrying
out any work essential to his operations under the provisions of this
Act,
he may enter into the necessary agreement with the owner or legal
occupant
of such private lands. If no agreement could be reached, or if the
owner
or legal occupant refuses to grant such easement, or in general, when
any
obstacle of whatever nature exists to the immediate and certain
acquisition
of the necessary surface area, or of any right indispensable to the
concessionaire
for the purpose of the concession, the Court of First Instance of the
province
where the land is situated shall, upon application of the
concessionaire
and posting of the necessary bond, grant to the said concessionaire
authority
to use and occupy the land needed by him in his operations, pending
final
determination of the case which shall include among others the
reasonable
value or rental of the land to be occupied and the compensation for any
resulting damage that the landowner or legal occupant may suffer as a
result
of such occupation.
When
the occupation of a private land is needed by the concessionaire in
connection
with his concession, for the purpose of constructing, maintaining,
operating,
and drilling oil wells, tanks, reservoirs, waterways, pipe lines,
roads,
railroads, tram lines, telephone and telegraph lines, airfields, radio
stations, powerhouses, transmission lines, pumping stations, wharves,
piers,
and terminals, which are hereby declared to be for public use or
benefit,
the right of eminent domain may be exercised by the Government through
the concessionaire, in accordance with the applicable laws on the
matter.
In
all cases of voluntary agreement between the concessionaire and a
private
landowner, as referred to in this article, a copy thereof shall be
furnished
to the Secretary of Agriculture and Natural Resources.
For
the purpose of this article the necessity of the work will be presumed
in the cases of well drilling and auxiliary works, construction of pipe
lines, tanks, pumping plants, power systems, warehouses, shops, and
means
of transport and communication.
ARTICLE
22. Easement over public land. When easement or right of
temporary
occupancy over public land is needed by a concessionaire for the
purpose
of carrying out any work essential to his operations under this Act,
such
right may be granted by the Secretary of Agriculture and Natural
Resources
with due regard to prior rights of third parties and subject to
applicable
laws and regulations.
The
presumption of necessity stated in article twenty-one applies likewise
in this case.
ARTICLE
23. Use of water, timber and clay. Concessionaires under this
Act
may utilize for any of the work to which his concession relates,
timber,
water, and clay from any public lands within such concession, all
subject
to existing prior rights thereto, to the regulations issued under this
Act and to other laws and regulations on the matter.
ARTICLE
24. General obligations. Work corresponding to concession
granted
under this Act shall be commenced with reasonable promptness and
prosecuted
with reasonable diligence in accordance with good oil field practice;
provided,
that in the case of Exploration or Exploitation Concession, the
performances
of the corresponding work, in compliance with the provisions of this
article,
successively in various areas included in the concession, in accordance
with an efficient and economic program determined by the concessionaire
and submitted to the Secretary of Agriculture and Natural Resources
will
be construed as reasonable diligence in regard to the total area
included
in such concession; conforming with accepted good practices in
connection
with modern and scientific methods of exploration, drilling, equipping
and operating wells to enable maximum economic production of petroleum;
avoiding hazards to life, health and property; avoiding the pollution
of
the air, and of public or private land or waters.
Non-compliance
with the provisions of this article may be the cause of the imposition
of penalties under the provisions of this or other laws; or of court
action
to compel compliance therewith; and continued non-compliance shall
constitute
cause for cancellation of the concession.
ARTICLE
25. Submission of information and reports by the concessionaires. Concessionaires
shall submit to the Secretary of Agriculture and Natural Resources all
information that the latter may require from time to time, particularly
but not limited to, reports on the results of geological and
geophysical
examinations including a complete history of each well formation
record;
electric logs, and result of all tests; production reports showing all
pertinent production data, etc., in the form and manner and at
intervals
prescribed by the regulations.
ARTICLE
26. Employment of Filipinos. Concessionaires under this Act
are
obligated to give preference to Philippine citizens in all types of
employment
within the country, insofar as such citizens are qualified to perform
the
corresponding work with reasonable efficiency and without hazard to the
safety of the operations; and are obligated likewise to maintain
effective
programs of training and advancement commensurate with the demonstrated
abilities of such citizens to perform satisfactorily the various types
of operations involved in working the concession. The concessionaires,
however, shall not be hindered from using employees of their own
selection
and without restriction for executive or technical work and for all
other
work which, in their judgment, and with the approval of the Director of
Mines, requires highly specialized training or long experience.
Each
concessionaire shall submit to the Government annual report giving
statistical
and descriptive information relevant to the provisions of this article,
as provided in the Regulations, and shall be obligated to demonstrate
to
the satisfaction of the Secretary of Agriculture and Natural Resources,
upon request, that these provisions are being complied with. In the
event
that, in the opinion of the Secretary of Agriculture and Natural
Resources,
such provisions are not complied with, he is empowered to require the
concessionaire
to take such steps as may be necessary to effect such compliance;
without
prejudice, however, to the right of the concessionaire under the
exception
provided in the last sentence of the first paragraph of this article.
ARTICLE
27. Force meager. Failure on the part of the concessionaire to
fulfill
any of the terms and conditions provided by this Act or its regulations
or by other relevant laws shall not be deemed a breach of such
obligation
on the part of the concessionaire in so far as such failure results
from
force meager, including the act of God, war, insurrection, riot, civil
commotion, strike, tide, storm, flood, lightning, explosion, fire
earthquake,
and any other happening which the concessionaire could not reasonably
prevent
or control or avoid.
ARTICLE
28. Application for concession. Application for concession under
this Act shall be filed with the Director of Mines who shall examine
and
pass upon the same as well as upon the qualifications of the applicant.
If he finds the application in order and the applicant duly qualified,
he shall forward the said application, together with his findings and
recommendations
thereon, to the Secretary of Agriculture and Natural Resources who may,
unless otherwise provided for in this Act, publish a notice thereof at
least once a week for three consecutive weeks in the Official Gazette
and
in any newspaper of general circulation, published in English in the
City
of Manila.
At
any time during the period of publication of the said notice, an
adverse
claim stating the nature and grounds thereof, may be filed with the
Director
of Mines. If no adverse claim is filed within the said period of
publication,
it shall be conclusively presumed that no such adverse claim exists and
thereafter no objection from third parties to the granting of the
concession
shall be heard; and the contract of concession shall be executed by the
Secretary of Agriculture and Natural Resources for the Republic of the
Philippines, and the concessionaire, in accordance with existing laws
and
regulations for the conveyance of leasehold rights, which contract of
concession
shall state definitely the principal rights and obligations of the
parties
concerned.
ARTICLE
29. Disposition of adverse claims. Adverse claims based upon
applications
filed at any time after the first date of publication of the notice
mentioned
in article twenty-eight shall not be considered. Adverse claims based
upon
conflict of applications shall be disposed of in accordance with the
provisions
of article thirty hereof. Adverse claims based upon other grounds shall
be decided by the Secretary of Agriculture and Natural Resources.
ARTICLE
30. Disposition of applications in conflict. In case an
adverse
claim is filed in accordance with article twenty-eight of this Act,
covering
areas in conflict and the adverse claimant is found to be duly
qualified
to apply for concession under this Act, the Director of Mines shall
inform
the applicant and the adverse claimant of the existence of such
conflict
and of any additional benefits to the Government which the Secretary of
Agriculture and Natural Resources may require in accordance with the
provisions
of article nineteen of this Act, whereupon each of them shall, within
sixty
days from the date of the receipt of such information, submit to the
Director
of Mines an amended application stating therein such additional
benefits
to the Government as he may desire to offer for the area in conflict.
The
Secretary of Agriculture and Natural Resources may accept such
application
which, in his opinion, will best serve the national interest. The right
of any aggrieved party to appeal to the courts as in ordinary cases is
hereby recognized.
ARTICLE
31. Qualifications of applicants. Applicants for concessions
under
this Act shall have the following qualifications:
In
case of an individual, he shall be a citizen of the Philippines, be of
legal age, and have the capacity to contract obligations.
In
case of an association of individuals, it shall be either a partnership
or a corporation duly organized and constituted under the laws of the
Philippines,
at least sixty per centum of the capital of which is and shall at all
times
be owned and held by citizens of the Philippines.
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During
the effectivity and subject to the provisions of the ordinance appended
to the Constitution of the Philippines, citizens of the United States
and
all forms of business enterprises owned and controlled, directly or
indirectly,
by citizens of the United States shall enjoy the same rights and
obligations
under the provisions of this Act in the same manner as to, and under
the
same conditions imposed upon, citizens of the Philippines or
corporations
or associations owned or controlled by citizens of the Philippines.
Any
applicant shall present satisfactory evidence showing that sufficient
finance,
organization, resources, technical competence, and skills necessary to
conduct the operations to be undertaken under the concession being
applied
for, in a manner which is in accordance with the best method known to
the
industry, are available to such applicant.
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ARTICLE
32. Officials and employees of the Government disqualified.
Officials
and employees of the executive branch of the Government connected with
the administration and disposition of mineral resources including
petroleum,
shall not be allowed, directly or indirectly during their incumbency
and
for five years thereafter, to apply or acquire concessions, or to be
interested,
in anywise, in any application filed, or concession acquired, under
this
Act.
CHAPTER
IIINON-EXCLUSIVE
EXPLORATION PERMIT ARTICLE
33. Who may apply. Any person legally qualified to acquire
concession
under the provisions of this Act may, upon application, acquire a
permit
for a non-exclusive right to undertake surface geological or
geophysical
investigations within Free Areas as defined in article fourteen of this
Act, subject to the provisions of article thirty-five and thirty-six of
this Act and the Regulations.
ARTICLE
34. Application for Non-Exclusive Exploration Permit. Application
for Non-Exclusive Exploration Permit shall be filed with the Director
of
Mines who shall examine and pass upon the application and
qualifications
of the applicant. He shall forward the same with his findings and
recommendation
to the Secretary of Agriculture and Natural Resources for his final
action.
The applicant shall pay an application fee of one hundred pesos in the
manner prescribed by the Regulations. In the event that no concession
is
granted corresponding to such application, the sum paid shall be
returned
to the applicant less such amount as corresponds to the expenses
incurred
by the Government in connection with the consideration of the
application,
as determined by the Regulations.
ARTICLE
35. Entry upon private property. Right to enter upon or to
occupy
private property in connection with the Non-Exclusive Exploration
Permit
must be secured from the owner or legal occupant thereof.
ARTICLE
36. Right conveyed under Non-Exclusive Exploration Permit.
Non-Exclusive
Exploration Permit issued under this Act conveys no right for the
permittee
to make any exploratory drilling, nor carry any priority or
preferential
right to the area it covers so as to entitle the permittee to exclusive
Exploration or Exploitation Concession, but is intended only to permit
geological and/or geophysical exploration, preparatory to making
application
for exclusive Exploration Concession.
The
permittee shall inform the Secretary of Agriculture and Natural
Resources
prior to undertaking any exploratory work as to the general nature of
the
work proposed to be done, the size of the parties to be put in the
field,
and the areas to be covered by such work. He shall submit at the end of
every six months a report on the result of the geological and/or
geophysical
surveys conducted by him.
ARTICLE
37. Term of Non-Exclusive Exploration Permit. The
Non-Exclusive
Exploration Permit shall be for a term of not exceeding two years,
renewable
for another two years, at the discretion of the Secretary of
Agriculture
and Natural Resources.
CHAPTER
IVEXPLORATION
CONCESSION ARTICLE
38. Definition of Exploration. The term "Exploration" means
all work that have for their object the discovery of petroleum,
including,
but not restricted to, surveying and mapping, aerial photography,
surface
geology, geophysical investigations, testing of subsurface conditions
by
means of borings or structural drillings, and all such auxiliary work
as
are useful in connection with such operations.
Test
wells drilled for exploratory purposes may be of such size and type
suitable
for oil production, but the actual production of oil is not included in
the term "Exploration," except that oil found during
exploration
may be freely used by the concessionaire in his operations for
exploration
purposes only within the same concession.
ARTICLE
39. Application for Exploration Concession. Application for
Exploration
Concession shall be filed with the Director of Mines in accordance with
the provisions of article twenty-eight of this Act. The Regulations
shall
prescribe the form and contents of application for Exploration
Concession.
ARTICLE
40. Map and technical descriptions. A map of the block desired
to
be explored shall accompany the application for Exploration Concession.
This map shall be prepared in accordance with the Regulations, and
shall
show the location of the block with regard to the municipalities and
province
or provinces in which it is located, the four corners of the block in
case
it is rectangular, or the natural boundaries thereof in case the block
adjoins rivers, creeks, lakes, or shore lines, or the extension or
projections
thereof into these bodies of water in case the block is, in whole or in
part, on submerged lands.
The
location of the block shall be plotted on Coast and Geodetic Survey or
Army base map, and shall show, among others, the topographic features
of
the area. The map shall be submitted together with the technical
description
of the corner markings and the metes and bounds or distances and
bearings
of the sides of the block. The technical description and map shall also
indicate the bearings and distances of the tie line from some known
reference
location monument to one corner, preferably Number 1, of the block, in
such a way that the block desired can be plotted from such tie line and
descriptions on the Progress or Index Map of the Bureau of Mines, where
all areas applied for shall be plotted to show the relative positions
of
such areas.
The
boundaries of the block desired shall be well-established on the ground
by placing permanent and conspicuous monuments, posts or mounds of
earth
on the corners, so that at any time, the block can be identified, and
later
be tied to accurate surveys. The bearings and distances of the block
applied
for exploration shall be sufficiently accurate so that the approximate
area of the block can be computed from the given bearings and distances
on the sides.
ARTICLE
41. Application fee for Exploration Concession. When an
application
for an Exploration Concession is filed, the applicant shall pay an
application
fee of one thousand pesos in the manner prescribed by the Regulations.
In the event that no concession is granted corresponding to such
application,
the sum paid shall be returned to the applicant less such amount as
corresponds
to the expenses incurred by the Government in connection with the
consideration
of the application as determined by the Regulations.
ARTICLE
42. Areas available for Exploration Concessions. Exploration
Concessions
may be granted on any lands within the Free, and National Reserve,
Areas
which are not covered by valid and existing Exploration or Exploitation
Concessions, or by Petroleum Drilling Leases acquired under the
Petroleum
Act (Act No. 2932), or by petroleum mining claims located and held
under
the Act of Congress of July first, nineteen hundred and two, as amended.
ARTICLE
43. Size and shape of exploration blocks. Exploration
Concessions
may be granted in lots or blocks as compact as possible, and
rectangular
in shape except when contiguous with the sea, bays, lakes, rivers,
lagoons,
roads, or with other concessions already granted which are of irregular
boundaries.
Each
block or lot shall not be more than one hundred thousand hectares nor
less
than twenty thousand hectares in area, and in no case shall the long
dimension
of the rectangle be more than five times the short dimension.
ARTICLE
44. Maximum exploration area a person may acquire. No person
shall
be entitled to more than five hundred thousand hectares of exploration
areas in any one petroleum region established in accordance with the
provisions
of article twelve of this Act, nor more than one million hectares in
the
whole territory of the Philippines.
ARTICLE
45. Rights conveyed under Exploration Concession. The
Exploration
Concession conveys upon the concessionaire, his heirs and assigns, from
the date of the granting of the concession, and during the exploration
period and any extension thereof, the exclusive right to explore the
block
granted, to do geological and geophysical work, to open test pits, to
conduct
drilling operations, and to do such other work related to exploration.
ARTICLE
46. Term of Exploration Concession. The initial term of an
Exploration
Concession shall be not more than four years counted from the date of
its
issuance: Provided, however, That if the concessionaire has
complied
with the provisions of this Act and the Regulations and with the terms
and conditions contained in the contract of concession, the Secretary
of
Agriculture and Natural Resources may grant an extension of the same
for
a term of three years, for its entire area or for any part thereof,
upon
application of the concessionaire made prior to the expiration of the
original
term. If during the said first extension, the concessionaire has also
complied
with the provisions of this Act and the Regulations and the terms and
conditions
contained in the contract of concession. The Secretary of Agriculture
and
Natural Resources may, upon application of the concessionaire made
prior
to the expiration of the first extension, grant, a further extension of
the said concession for its entire area or for any part thereof, for
another
term of three years, making the total term for Exploration Concession
not
more than ten years.
The
extension shall be granted under the same terms and conditions as those
contained in the original concession, subject, however, to the
provisions
of articles forty-seven and forty-nine of this Act.
No
further renewal shall be allowed to any exploration concessionaire at
the
end of ten years from the date of the original concession.
ARTICLE
47. Exploration work obligations. At the beginning of each
calendar
year during the life of the concession, the concessionaire shall submit
to the Director of Mines, a program of exploration work to be
undertaken
by the concessionaire with his concession during that year.
He
is obligated to spend in the direct prosecution of exploration work
within
his concession, such as topographic, or geological reconnaissance;
mapping
or cross sectioning, geophysical surveys by magnetometer, gravimeter or
seismograph; core or exploratory drilling; or any combination of the
said
work, the following amounts:
Initial
term:
First
year
Not
less than fifty centavos per hectare per year, or fraction thereof.
Second
year
Not
less than one peso per hectare per year, or fraction thereof.
Third
year
Not
less than one peso and fifty centavos per hectare per year, or fraction
thereof.
Fourth
year
Not
less than two pesos per hectare per year, or fraction thereof.
First
extension:
Fifth
to seventh year
Not
less than two pesos and fifty centavos per hectare per year, or
fraction
thereof.
Second
extension:
Eight
to tenth year
Not
less than three pesos per hectare per year, or fraction thereof.
The
cost of delivered materials or equipment used in the exploration work
shall
be considered as proper expenditures for such work. The concessionaire
shall give satisfactory evidence to the Government of such expenditures
in accordance with the Regulations.
Any
amount actually spent for exploration work in excess of the minimum
amount
required for any year or years may be carried forward and credited to
exploration
work obligations required for the succeeding years during the existence
of the concession.
For
failure to comply with the minimum work obligations in any one year as
herein above stipulated, the concessionaire shall pay to the Government
the difference between the minimum amount required and that actually
spent
for any year. Continued failure to perform the necessary exploration
work
within the area covered by the concession shall. In addition to the
above
penalty, result in the cancellation of the concession as provided for
in
this Act.
In
order to guarantee faithful compliance with the required exploration
work,
a bond of sufficient amount to be fixed by the Regulation, shall be
posted
by the concessionaire.
ARTICLE
48. Work obligations on two or more exploration blocks within any
one
petroleum region. In case two exploration blocks are held by the
same
concessionaire which are adjoining to each other in any one petroleum
region,
the total amount of work obligations for exploration required for the
initial
term of four years, for the two adjoining blocks, may be spent within
any
one of the two adjoining blocks or any portion thereof as if they are
covered
by a single concession.
The
total amount of work obligations required to be spent annually during
the
first and second extensions under article forty-seven of this Act on
any
two or more exploration blocks, whether adjoining or not, then existing
and held by a concessionaire for the first and second extensions within
any established petroleum region, may be spent within any one or more
of
the said blocks or any portion thereof.
ARTICLE
49. Annual exploration tax. Each holder of an Exploration
Concession
shall pay during the whole period of such concession and its extension
or extensions if any, an annual exploration tax as follows:
Initial
term:
First
year
Not
less than five centavos per hectare per year, or fraction thereof.
Second
and third year
Not
less than seven and one-half centavos per hectare per year, or fraction
thereof.
Fourth
year
Not
less than ten centavos per hectare per year, or fraction thereof.
First
extension:
Fifth
to seventh year
Ten
centavos per hectare per year, or fraction thereof.
Second
extension:
Eighth
to tenth year
Twelve
and one-half centavos per hectare per year, or fraction thereof.
ARTICLE
50. Renunciation of areas covered by Exploration Concession. The
holder of an Exploration Concession may, at any time, renounce the
whole
or any part of the total area covered by his concession: Provided,
That, in case of partial renunciation, the portion retained shall be
not
less than twenty thousand hectares, unless the same is contiguous to
another
exploration block or blocks held by the same concessionaire, in which
case,
the total area of all the contiguous blocks thus retained for
exploration
shall be not less than twenty thousand hectares.
CHAPTER
VEXPLOITATION
CONCESSION ARTICLE
51. Definition of Exploitation. "Exploitation" means all work
within
the area embraced by an Exploitation Concession that have for their
object
the production of petroleum within such area, including, but not
restricted
to, drilling and operating wells, providing and operating pumping and
storage
facilities; pipe lines and other such work and facilities as are useful
for the purpose of making petroleum available for sale, manufacture or
refining within or for shipment from such area; but does not include
any
operation which is a part of manufacturing or refining, or any work
outside
such area which are a part of a pipe line or other special
transportation
system.
ARTICLE
52. Application for Exploitation Concession. Application for
Exploitation
Concession shall be filed with the Director of Mines in accordance with
the provisions of article twenty-eight of this Act. The Regulations
shall
prescribe the form and contents of application for Exploitation
Concession.
ARTICLE
53. Application for Exploitation Concession covering areas within
Exploration
Concession. An exploration concessionaire, at any time during the
life
of his concession, including any extension thereof, may select for
exploitation
purposes one or more parcels from the area covered by his Exploration
Concession.
Upon application and fulfillment of all the requirements of this Act,
and
provided that the total area of such parcel or parcels so selected from
any one exploration block shall not exceed one-half of the area of such
block, an Exploitation Concession covering such parcel or parcels,
shall
be granted to such applicant. Such parcels may be selected by the
applicant
anywhere within the exploration block, whether contiguously or
separately.
Provided,
that all the requirements of this Act and the Regulations have been
complied
with, an application for Exploitation Concession filed as provided for
in this article shall, pending the issuance of an Exploitation
Concession
covering the areas for which application has been made, operate to
confer
upon the Concessionaire all the rights and obligations which are
conferred
by this Act through an Exploitation Concession: Provided, further,
That an Exploitation Concession may also be granted to any person who
without
being a holder of Exploration Concession discovers and registers with
the
Bureau of Mines in accordance with article sixty-five hereof any
natural
deposit or seep or natural gas emanation.
ARTICLE
54. Map of the exploitation areas. In the exercise of the right
of exploration, the concessionaire shall prepare at any time during the
exploration period, or during extensions, if there by any, the general
map of the respective exploration block, showing the exploitation
parcel
or parcels he may have selected, in preparation to obtaining the
Exploitation
Concession. This map shall be prepared from an accurate transit and
chain
survey or from an aerial photographic survey, or the combination of
both,
and shall be prepared in accordance with existing regulations governing
such kinds of survey issued by the Director of Mines, and shall show
the
location of the boundary monuments of the exploration block and of the
different exploitation parcel or parcels within the block and the area
and true bearings and distances of the sides thereof. Copies of this
map
shall accompany the application for Exploitation Concession.
ARTICLE
55. Application fee for Exploitation Concession. When an
application
for an Exploitation Concession is filed, the applicant shall pay an
application
fee of two thousand pesos, in the manner prescribed by the Regulations.
In the event that no concession is granted corresponding to such
application
the sum paid shall be returned to the applicant less such amount as
corresponds
to the expenses incurred by the Government in connection with the
consideration
of the application as determined by the Regulations.
ARTICLE
56. Areas available for exploitation. Areas covered by
Exploration
Concession held by the applicant, subject to the provisions of article
fifty-three of this Act, and areas within the National Reserve, are
available
for exploitation.
ARTICLE
57. Size and shape of Exploitation Concession. The Exploitation
Concession shall be granted in parcels or parcels, rectangular in shape
as much as possible, except when contiguous with the seas, bays, lakes,
rivers, lagoons, roads, or with other existing concessions of irregular
boundaries; or when otherwise approved by the Secretary of Agricultural
and Natural Resources.
The
total area of the exploitation parcel or parcels which may be acquired
under a single concession shall not be more than fifty thousand
hectares
nor less than ten thousand hectares, and in no case shall the greater
dimension
of the rectangle be more than five times the other, nor shall the total
area of the parcel or parcels to be covered by the Exploitation
Concession
exceed one-half of the total area of the exploration block.
ARTICLE
58. Maximum exploitation area that may be acquired. No person
shall
be allowed to hold more than two hundred and fifty thousand hectares of
exploitation area in any one petroleum region, nor more than five
hundred
thousand hectares in the whole territory of the Philippines.
ARTICLE
59. Rights conveyed under exploitation concession. An
exploitation
concessionaire, his heirs and assigns, has the exclusive right, during
the term of the concession, to drill within the boundaries projected
vertically
downward of the parcel or parcels covered by his concession, to extract
within the boundaries thereof the substances referred to in this Act,
to
utilize them once they are extracted, and to do all acts authorized
within
the scope of exploitation, as defined in article fifty-one of this Act,
subject to the provisions of this Act and the Regulations that may be
issued
by the Secretary of Agriculture and Natural Resources regarding
conservation,
prevention of waste, and other pertinent matter.
In
case roads and/or bridges are constructed by the concessionaire in
connection
with the operation of his exploitation concession, the same shall be
available
for public use except when otherwise agreed upon between the Secretary
of Agriculture and Natural Resources and the concessionaire.
ARTICLE
60. Exploitation work obligations. At the beginning of each
calendar
year during the life of the concession, the concessionaire shall submit
to the Director of Mines, a program of exploitation work proposed to be
undertaken by the concessionaire within his concession during that year.
The
concessionaire shall commence drilling operations within one year from
the date the Exploitation Concession is granted within the area covered
by the concession and shall continue diligently such drilling
operations
in accordance with good oil field practice. He shall be obligated to
develop
and bring into production the exploitation area granted to him and any
discovery areas that he may find, and to continue such development and
production until at least the domestic consumption requirements of
petroleum
in the Philippines, determined in consultation with the Secretary of
Agriculture
and Natural Resources, are met by the total net production from all
sources
of indigenous production in the Philippines, if the petroleum deposit
discovered
by the concessionaire shall permit such development in accordance with
good petroleum engineering practice.
ARTICLE
61. Exploitation work obligations in two or more Exploitation
Concessions
in the same petroleum region. A person holding two or more
Exploitation
Concessions in the same petroleum region, may be permitted to
concentrate
the exploitation work obligations required for all the Exploitation
Concessions
held by him in the same petroleum region, within any one of his
Exploitation
Concession, as long as the drilling operations are diligently conducted
with a creditable expenditure and in accordance with a drilling
program:
Provided, however, That no Exploitation Concession shall remain
for a period of more than five consecutive years without drilling
operations.
Such work may be credited only upon prior written approval of the
Secretary
of Agriculture and Natural Resources.
ARTICLE
62. Production operations. Once production is established in
an
Exploitation Concession, production operations on the concession may
not
be suspended for more than six months without prior written approval of
the Secretary of Agriculture and Natural Resources.
Suspension
of operations shall in no case be authorized for more than two years at
any one time, except in case of force meager.
ARTICLE
63. Existing Petroleum Drilling Leases and petroleum mining claims
may
come under the provisions of this Act. Holders of Petroleum
Drilling
Leases under the provisions of the Petroleum Act (Act No. 2932) and of
petroleum mining claims located and held under the provisions of the
Act
of Congress of July first, nineteen hundred and two, as amended, may
surrender
their rights thereto by filing applications with the Secretary of
Agriculture
and Natural Resources for Exploitation Concessions under the provisions
of this Act, and the latter may, upon receipt of such applications,
grant
Exploitation Concessions covering the same, subject to all the
conditions,
obligations, and privileges provided for under this Act.
ARTICLE
64. Annual exploitation tax. Each holder of an Exploitation
Concession
shall pay throughout the life of such concession, in the manner
prescribed
by the Regulations, an exploitation tax as follows:
During
the first five-year period, not less than fifty centavos per hectare
per
year, or fraction thereof.
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During
the second five-year period, not less than one peso per hectare per
year,
or fraction thereof.
During
the third five-year period, not less than one peso and fifty centavos
per
hectare per year, or fraction thereof.
During
the fourth five-year period, not less than three pesos per hectare per
year, or fraction thereof.
During
the fifty five-year period, not less than five pesos per hectare per
year,
or fraction thereof.
Thereafter,
during the period or periods of its renewal, if any, not less than five
pesos per hectare per year or fraction thereof, unless modified by the
Secretary of Agriculture and Natural Resources.
ARTICLE
65. Royalty. Exploitation concessionaires shall pay to the
Government
a royalty which shall not be less than twelve and one-half per cent of
the petroleum produced and saved, less that consumed in the operations
of the concessionaire in the working of such Exploitation Concession:
Provided,
That natural gas returned to the formation shall not be subjected to
royalty.
The
royalty paid to the Government on petroleum or natural gas produced
from
the date commercial production is started, from well or wells within
the
radius of one kilometer from any discovered, located, registered and
verified
petroleum natural deposit or seep or natural gas emanation, shall be
deducted
by ten per cent thereof, which deduction shall be due and payable to
the
discoverer of the said natural deposit or seep or gas emanation:
Provided,
That the petroleum natural deposit or seep or gas emanation is not
covered
by another discovery previously registered in the Bureau of Mines: And
Provided, further, That the discovery and location are made and
registered prior to the date of the granting of an Exploration or
Exploitation
Concession, covering the area where such petroleum natural deposit or
seep
or gas emanation was discovered.
The
discoverer shall mark the point of discovery with prominent and
permanent
object and with a placard stating the name of the discovery, the name
of
the discoverer, and the date of discovery and location, within a period
of thirty days from the date of the discovery or, if discovered before
the approval of this Act, within thirty days after such approval.
Declaration
of discovery and location describing specifically the facts and
circumstances
of the discovery, and containing such other matters as may be required
by the Director of Mines, shall be prepared under oath by the locator
or
discoverer who shall register the same in the office of the Bureau of
Mines,
Manila, within ninety days from the date of location. The Director of
Mines
shall register such declaration upon payment of the registration fee of
ten pesos and submittal of a sample of the oil or natural gas
discovered.
All discoveries not duly declared and registered within the period
herein
set forth, shall be considered as having been abandoned by the
discoverer.
The
rights acquired by the discoverer shall be based on actual discovery,
followed
by registration within the period provided for in this article. The
rights
of the discoverer to his discovery shall expire ten years after the
date
of registration: Provided, however, That if within the said
period
an Exploration or Exploitation Concession is granted covering the oil
seeps
or natural deposits or natural gas emanations discovered, the rights of
the discoverer shall be deemed to continue from the date the
Exploration
or Exploitation Concession is granted until ten years from the date
commercial
production is first started from any well or wells within the discovery
area.
ARTICLE
66. Exploitation tax credited against royalty. All exploitation
taxes to which any concessionaire shall be liable under article
sixty-four
of this Act, during any year on any or all Exploitation Concessions
held
by him in the same petroleum region, shall be credited against the
total
royalty payments on all the petroleum produced by the concessionaire
from
any or all the Exploitation Concessions held by him within the same
petroleum
region and paid by such concessionaire in the same year: Provided, That,
such deduction shall apply only to amounts due for exploitation tax in
excess of fifty centavos per hectare per year.
For
the purpose of computing the deduction due under this article, the
value
of any royalty paid in kind shall be converted to cash as provided for
in article sixty-eight.
ARTICLE
67. Manner for payment of royalty. Royalty may be paid either
wholly
or partly in kind, or wholly or partly in cash, at the election of the
Secretary of Agriculture and Natural Resources, but such election shall
not be changed during any quarter for which it has once been made, nor
shall it be changed for any succeeding quarter without written notice
to
the concessionaire at least thirty days prior to the commencement of
such
quarter.
When
the Secretary of Agriculture and Natural Resources elects to receive
the
royalty wholly or partly in kind, the concessionaire shall make
delivery
thereof at the place of production or at any established receiving and
storage station on the transportation system which is employed by the
concessionaire
for the transportation of his own petroleum or similar kind, as elected
by the Secretary of Agriculture and Natural Resources.
When
the Secretary of Agriculture and Natural Resources elects to receive
the
royalty in cash, the same shall be paid quarterly in advance, and the
amount
of royalty to be paid in any quarter shall be determined by the
petroleum
production during the next preceding quarter.
The
procedure for determining the amount of royalty due and the payment of
such royalty, except as specified in this Act, shall be fixed by the
Regulations.
ARTICLE
68. Liquidation of royalty in cash. When the Secretary of
Agriculture
and Natural Resources elects to have the royalty paid in cash, as
provided
for in article sixty- seven of this Act, the market value of the
petroleum
at the place of its production shall be used for the calculation of the
amount due; and it shall be determined by taking as a basis the average
price of petroleum of the same quality, during the preceding quarter,
in
the governing market or markets as specified in the Regulations; and
deducting
from such average price the cost of transportation from the place of
production
to such markets; and deducting also the cost of any processing or
treatment
which is necessary to make the petroleum suitable for such
transportation.
For
this purpose the cost of transportation shall include all actual costs
inherent therein, such as freight according to the usual tariffs, port
fees, storage costs, pumping costs, and the costs of operating and
maintaining
the facilities provided expressly for such transportation. Similarly
the
cost of processing or treatment shall include all actual costs inherent
therein, such as for chemicals, stabilization, compression, and the
cost
of operating and maintaining the facilities provided expressly for such
processing or treatment.
The
Secretary of Agriculture and Natural Resources is empowered to enter
into
agreement with the concessionaire for the purpose of determining the
market
value of petroleum and the deductions to be allowed in computing the
market
value at the place of production, for the purpose set forth in this
article.
ARTICLE
69. Acceptance of royalty payments. Within sixty days
following
the end of each month during which the royalty has been paid in kind,
or
following the end of each quarter in which royalty has been paid in
cash,
the Secretary of Agriculture and Natural Resources shall notify the
concessionaire
in writing that such payment is accepted in full discharge of the
corresponding
obligations as fixed by this Act; or that such is not the case for
certain
stated reasons, in which latter case the procedure fixed in the
Regulations
shall be followed for the purpose of making any necessary corrections.
Failure of the Secretary of Agriculture and Natural Resources to thus
notify
the concessionaire of objection to the royalty payments made, within
the
foregoing time limits, shall be construed as acceptance by the
Secretary
of Agriculture and Natural Resources of such payments.
Acceptance
of royalty payments as provided for in this article shall be deemed
irrevocable.
ARTICLE
70. Field storage tanks and storage. Exploitation
concessionaire
is obligated to construct and maintain at, or in the vicinity of, the
place
or places of production, storage tanks of sufficient capacity to
operate
the producing field or fields in accordance with good oil field
practice.
The
holder of such concession is under obligation to store, for a period
not
in excess of thirty days, such royalty in kind, free of expense to the
Government. Should the Government have no adequate facilities for the
handling
and/or storage of such petroleum after said period, the concessionaire
shall supply facilities for the handling and/or storage of the same for
a reasonable charge, which period and charge shall be as mutually
agreed
upon between the Secretary of Agriculture and Natural Resources and the
concessionaire in advance: Provided, That, in no event shall the
concessionaire be required to store beyond such thirty days more than
one
hundred thousand barrels of such petroleum at any one time, nor of any
petroleum other than that produced within the area held by the
concessionaire.
ARTICLE
71. Exploitation concessionaire may be obliged to refine crude oil
in
the Philippines. The Secretary of Agriculture and Natural Resources
may, after due investigation, require an exploitation concessionaire to
refine part or all of the crude oil produced in his concession, in any
refinery established in the Philippines in accordance with the
provisions
of this Act: Provided, That, there is such refinery with
sufficient
capacity and adequate facilities to handle such crude oil in accordance
with good refining practice: And Provided, further, That the
quantity
of such crude oil of the concessionaire that may be required to be
refined
in the Philippines in relation to the total net production from his
concession
shall not exceed the proportional amount that the total domestic
requirements
bear to the total net production from all indigenous sources in the
Philippines.
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ARTICLE
72. Term of Exploitation Concession. The term of an
Exploitation
Concession shall not exceed twenty-five years counted from the date of
its issuance, renewable for another twenty-five years at the option of
and upon application of the concessionaire made prior to the expiration
of the original term.
ARTICLE
73. Renunciation of areas covered by Exploitation Concession.
The
holder of an Exploitation Concession may, at any time, renounce the
whole
or any part of the total area covered by his Exploitation Concession: Provided,
That, in case of partial renunciation, the area of the parcel or
parcels
whether contiguous or not retained for exploitation shall be not less
than
ten thousand hectares.
CHAPTER
VIREFINING
CONCESSION ARTICLE
74. Definition of Refining. The term "Refining" means
the
processing or treating of petroleum by chemical or physical means for
the
purpose of making or separating marketable products; not including,
however,
such operations, separate from the foregoing, as gas compression,
removal
of noxious gases, crude oil stabilization or treatment for emulsion, or
any other operation which has as its principal aim the avoidance of
hazard
or loss, or which is incidental to production or to transportation.
ARTICLE
75. Application for Refining Concession. Application for
Refining
Concession shall be filed with the Director of Mines in accordance with
article twenty-eight of this Act.
When
the granting of a Refining Concession is obligatory upon the Government
by reason of the provisions of article eleven of this Act, and provided
that the requirements of this Act and of the Regulations have been
complied
with, an application for Refining Concession filed as provided in
article
twenty-eight shall operate to confer upon the concessionaire all the
rights
and obligations which are conferred by this Act through such
concession,
pending the execution of the contract of concession. The Secretary of
Agriculture
and Natural Resources may, in his discretion, grant a Refining
Concession
to any person duly qualified under the provisions of this Act even
though
he is not a holder of an Exploitation Concession. Likewise a refining
concession
may be granted to any person who, without being a holder of an
Exploitation
Concession discovers and registers with the Bureau of Mines under the
provision
of article sixty-five hereof, any natural deposit of oil or seep or
emanation
of gas.
ARTICLE
76. Refining application fee. When an application for a
Refining
Concession is filed, the applicant shall pay an application fee of two
thousand pesos, in the manner prescribed by the Regulations. In the
event
that no concession is granted corresponding to such application, the
sum
paid shall be returned to the applicant less such amount as corresponds
to the expenses incurred by the Government in connection with the
consideration
of the application as determined by the Regulations.
ARTICLE
77. Rights conveyed under Refining Concession. Refining
Concession
confers upon the concessionaire the non-exclusive right to provide
facilities
for the manufacture of, and to manufacture, petroleum products, subject
to the provisions of this Act; and to carry out such auxiliary works
and
operations as are essential to the successful conduct of the
undertaking,
such as, but not limited to, the generation of steam and electricity;
the
treatment and use of water; the production or regeneration of chemicals
used in manufacturing; the fabrication and filling of containers; the
erection
of shops, warehouses, and other buildings; the construction and
operation
of communication systems and roads within and for access to the works;
and the provision and operation of facilities for receiving, storing,
and
shipping materials or products and for their transportation within or
between
parts of the works to which the concession relates.
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It
shall be understood that all auxiliary works and operations and the
products
thereof to which the rights provided in this article apply, shall be
for
the exclusive use of the concessionaire in the operation of his
concession
or concessions subject to the limitations set forth in article
seventy-eight
hereof: Provided, however, That all roads and bridges
constructed
by the concessionaire except those within the compound of the refinery,
shall be available for public use, except when otherwise agreed upon
between
the Secretary of Agriculture and Natural Resources and the
concessionaire.
ARTICLE
78. Utilization of refining capacity. The holder of a Refining
Concession
shall have the preferential right to utilize his installations for the
refining or manufacture of petroleum produced by him from his
concession,
but is obligated to utilize any remaining capacity for the refining or
manufacture, pro rata, of such other petroleum as may be offered by
others
for refining or manufacture, and to charge without discrimination such
rates as may have been approved by the Secretary of Agriculture and
Natural
Resources.
When
a refining concessionaire is also an exploitation concessionaire, the
Secretary
of Agriculture and Natural Resources may require that the royalty in
kind
due to the Government from the same concessionaire, or an equivalent
amount
of petroleum of the Government from other sources, be refined or
manufactured,
pro rata, with that owned by the refining concessionaire, up to
the capacity of the installation; and in all cases petroleum owned by
the
Government shall have priority over all other petroleum for the
utilization
of the refining or manufacturing capacity in excess of that required to
refine or manufacture petroleum owned by the refining concessionaire.
Procedure
for the determination of refining rates and the conditions governing
the
refining of petroleum other than that owned by the refining
concessionaire
shall conform to the Regulations.
ARTICLE
79. Petroleum produced under this Act shall be given refinery
preference.
Any established refinery may be required by the Secretary of
Agriculture
and Natural Resources to refine crude petroleum produced in the
Philippines
in preference over any imported crude petroleum.
ARTICLE
80. Term of Refining Concession. The term of a Refining
Concession
shall not exceed twenty-five years counted from the date of its
issuance,
renewable for another twenty-five years, upon application of the
concessionaire
filed prior to the expiration of the original term.
ARTICLE
81. Right to establish a refinery may be ceded but concessionaire
may
be required to establish a refinery under certain conditions. An
exploitation
concessionaire may assign, transfer, or cede his right to establish a
refinery
in the Philippines granted him under article eleven of this Act in
favor
of any person qualified under the provisions of this Act, upon prior
written
permission of the Secretary of Agriculture and Natural Resources.
However,
the Secretary of Agriculture and Natural Resources may, after due study
of the economic and technical problems involved on the part of the
exploitation
concessionaire and of the need of the Philippines for a suitable
refinery,
require an exploitation concessionaire, after he shall have developed a
recoverable petroleum reserve of one hundred forty million barrels or
more
in any one or more of his concessions granted under this Act, capable
of
maintaining a production rate of ten thousand barrels a day for at
least
fifteen years, to establish in the Philippines a refinery of a capacity
which shall be not less than ten thousand barrels per day.
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ARTICLE
82. Renunciation of Refining Concession. Any Refining
Concession
may be renounced at any time, except when the undertaking to build a
refinery
is imposed upon an Exploitation Concessionaire under the provisions of
articles nineteen and eighty-one of this Act, in which case, the
renunciation
shall be subject to the prior written approval of the Secretary of
Agriculture
and Natural Resources.
Renunciation
extinguishes all rights granted by the concession, but does not relieve
the concessionaire from making any payments due to the Government.
CHAPTER
VIIPIPE
LINE CONCESSION ARTICLE
83. Application for Pipe Line Concession. Application for Pipe
Line
Concession shall be filed with the Director of Mines in accordance with
article twenty-eight of this Act.
When
the granting of a Pipe Line Concession is obligatory upon the
Government
by reason of the provisions of article eleven, and provided, that all
the
requirements of this Act and of the Regulations have been complied
with,
an application filed shall operate to confer upon the concessionaire
all
the rights and obligations which are conferred by this Act through such
a concession, pending the execution of the contract of concession.
Pipe
Line Concession may also be granted to any person legally qualified
under
this Act, who is not a holder of an Exploitation or Refining
Concession,
upon his filing with the Director of Mines an application therefore.
ARTICLE
84. Pipe Line application fee. When an application for a Pipe
Line
Concession is filed, the applicant shall pay an application fee of two
thousand pesos, in the manner prescribed by the Regulations. In the
event
that no concession is granted corresponding to such application, the
sum
shall be returned to the applicant less such amount as corresponds to
the
expenses incurred by the Government in connection with the
consideration,
as determined by the Regulations.
ARTICLE
85. Rights conveyed under Pipe Line Concession. A pipe line
concessionaire
acquires the non-exclusive right to transport petroleum, by means of,
and
through, a pipe line or system of pipe lines, between the sources of
production
and/or refining and the places defined in the Pipe Line Concession, in
accordance with the provisions of this Act and the Regulations.
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This
concession right includes the construction and operation of pipe lines,
pumping or compressing stations, storage tanks, gas tanks, power
plants,
shops, storehouses and other buildings, water supply and communication
systems, roads, and such other equipment or facilities as may be needed
for the purpose of the concession.
All
such auxiliary works and operations and the products thereof shall be
for
the exclusive use of the concessionaire in the operation of his
concession:
Provided, however, That all roads and bridges constructed by
the
concessionaire, except as may otherwise be agreed upon between the
Secretary
of Agriculture and Natural Resources and the concessionaire, shall be
available
for public use.
ARTICLE
86. Pipe line concessionaire as common carrier. A pipe line
concessionaire
shall have the preferential right to utilize his installations for the
transportation of petroleum owned by him, but is obligated to utilize
any
remaining transportation capacity pro rata for the transportation of
such
other petroleum as may be offered by others for transport, and to
charge
without discrimination such rates as may have been approved by the
Secretary
of Agriculture and Natural Resources.
When
the pipe line concessionaire is also an exploitation concessionaire,
the
Secretary of Agriculture and Natural Resources may require that the
royalty
in kind of the Government received from the same concessionaire, be
transported,
pro rata, with that owned by the concessionaire from the same
concession;
and in all cases the petroleum of the Government shall have priority
over
all other petroleum in the utilization of the excess capacity of the
pipe
line over that required to transport petroleum owned by the pipe line
concessionaire.
Procedure
for the determination of pipe line transportation rates and the
conditions
governing the transportation of petroleum other than that owned by the
concessionaire shall conform to the Regulations.
ARTICLE
87. Term of Pipe Line Concession. The term of a Pipe Line
Concession
shall not exceed twenty-five years counted from the date of its
issuance,
renewable for another twenty-five years, upon application of the
concessionaire
filed prior to the expiration of the original term.
ARTICLE
88. Renunciation of Pipe Line Concession. Any Pipe Line
Concession
may be renounced at any time, except when the undertaking to build a
pipe
line is imposed upon an Exploitation Concessionaire under the
provisions
of article nineteen of this Act, in which case, the renunciation shall
be subject to the prior written approval of the Secretary of
Agriculture
and Natural Resources.
Renunciation
extinguishes all rights granted by the concession, but does not relieve
the concessionaire from making any payments due to the Government.
CHAPTER
VIIIPENALTIES
AND EXTINCTION OF RIGHTS ARTICLE
89. Cancellation of concession for falsehood or omission in
application.
The statements made in the application or made in support thereof,
shall be considered as conditions and essential parts of the concession
that may be granted by virtue of such application, and any falsehood in
those statements or omission of facts which may alter, change, or
affect,
substantially the facts set forth in said statements may cause the
cancellation
of the lease granted.
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ARTICLE
90. Other causes for cancellation of concession. (a) Exploration
Concessions may be canceled under any of the following causes:
1.
For failure of the concessionaire to perform the work obligations
required
by article forty-seven of this Act for two consecutive years; and
2.
For failure to pay for two consecutive years the exploration tax due
thereon,
as required by article forty-nine of this Act.
(b)
Exploitation Concessions may be canceled under any of the following
causes:
1.
For failure of the concessionaire to perform the exploitation work
obligations
as required under the provisions of articles sixty and sixty-one of
this
Act, for two consecutive years;
2.
For suspending production operations for more than six months without
prior
written approval of the Secretary of Agriculture and Natural Resources
as provided for in article sixty-two of this Act;
3.
For failure to pay for two consecutive years the annual exploitation
tax
due thereon, as required by article sixty-four of this Act;
4.
For failure to deliver or pay to the Government its royalty within one
year from the date such royalty becomes due.
(c)
Refining and Pipe Line Concessions may be canceled for failure of the
concessionaire
to begin the construction of a refinery and pipe line, as the case may
be, within one year from the date of the issuance of such concessions.
ARTICLE
91. Procedure for cancellation. Before any concession is
canceled
for cause or caused mentioned in this Act, the concessionaire shall
first
be notified in writing of such cause or causes, and shall be given an
opportunity
to be heard, and to show cause why the concession shall not be
canceled.
If upon investigation, the Secretary of Agriculture and Natural
Resources
shall find the concessionaire to be in default, the latter shall be
given
an opportunity to correct such default. If the concessionaire shall
continue
to be so in default for a period of ninety days from the date of the
decision
finding him in default, the concession may be canceled in an order to
that
effect, copy of which shall be furnished to the concessionaire, and
which
order shall become final forty-five days from receipt thereof, unless
the
concessionaire decides to take advantage of the provisions of article
one
hundred seven of this Act, in which case the concession shall continue
to be in force until, and if, a competent court decides otherwise.
ARTICLE
92. Extinction of rights. Rights acquired by virtue of a
concession
granted under this Act shall become extinguished upon the expiration of
its term including the extensions or renewals thereof, if any, or upon
the cancellation or renunciation of such concession.
In
the event of such extinction of rights, any sum payable to the
Government
by the concessionaire and then unpaid shall become due and payable
forthwith,
the property of the concessionaire shall be disposed of in accordance
with
the provisions of article ninety-three of this Act, and the concession
contract shall be surrendered to the Secretary of Agriculture and
Natural
Resources.
ARTICLE
93. Title to areas, property, and equipment after renunciation,
cancellation,
or expiration of a concession. (a) Upon the renunciation,
cancellation,
or expiration of an Exploration or Exploitation Concession, the area
covered
thereby shall automatically become part of the National Reserve.
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(b)
Upon the renunciation, cancellation, or expiration of an Exploration
Concession,
or of an Exploitation Concession within the first term of twenty-five
years
or within the first fifteen years of its renewal, if any, as provided
for
in this Act, the title rights to all apparatus, materials, equipment,
supplies
and other personal properties, all works, buildings and other
facilities
and structures which the concessionaire places on the land under the
terms
of the concession, including but not limited to drilling pipe,
warehouse
stocks, automotive, aviation and marine equipment, shall remain vested
in the concessionaire, and the concessionaire shall have the right to
remove
and export the same at any time within one year counted from the date
the
concessionaire shall cease to retain the right to use the lands subject
to the concession on which the said property is located: Provided,
however,
That the Government shall acquire title to all properties not so
revoked
at the end of the said one-year period: Provided, further, That
the Government shall have the exclusive right of option, but not the
obligation,
to buy from the concessionaire any or all of the properties which the
concessionaire
has the right to remove under this paragraph within ninety days from
the
date the concession is renounced, canceled or terminated: And Provided,
finally, That the concessionaire shall maintain said properties,
pending
decision of the Government to purchase the same, in as good condition
as
the condition of said properties on the date of the said renunciation,
cancellation or termination of the concession, ordinary wear and tear
and
damage caused by circumstances beyond the control of the concessionaire
excepted. The price of the said properties shall be fixed by agreement
between the parties but in case of any disagreement as to the price,
the
same shall be submitted to a board of appraisal of three members to be
appointed, one, by the Secretary of Agriculture and Natural Resources,
another by the concessionaire and the third, by the two appraisers
appointed
by the two parties, which board shall determine the price to be paid by
the Government for the said properties. Roads, bridges, airports,
wharves,
and casings in the ground shall become the property of the Government
without
any permanent.
(c)
In case of renunciation, cancellation or termination of the
Exploitation
Concession after the fifteenth year from the date of the renewal, if
any,
of the concession, all the property mentioned in the preceding
paragraph
shall become the property of the Government without payment or
indemnification
to the concessionaire.
(d)
The above provisions do not apply to any refinery built by the
concessionaire
as said refinery shall continue to be the exclusive property of the
owner
thereof even after the termination of the concession: Provided,
That roads and bridges constructed by the concessionaire shall become
the
property of the Government.
CHAPTER
IXOFFICIALS
IN CHARGE AND DUTIES ARTICLE
94. The Secretary of Agriculture and Natural Resources as executive
officer. The Secretary of Agriculture and Natural Resources shall
be
the executive officer charged with carrying out the provisions of this
Act, through the Director of Mines who shall act under his immediate
supervision
and control. As such executive officer, the Secretary of Agriculture
and
Natural Resources shall be vested with the authority to prescribe rules
and regulations and issue orders which he may find necessary to
effectuate
the provisions and purposes of this Act.
ARTICLE
95. Authority of Secretary of Agriculture and Natural Resources to
create
necessary offices. The Secretary of Agriculture and Natural
Resources
is authorized to create an Administration Unit and a Technical Board,
both
under the Director of Mines.
The
Administration Unit shall be under the supervision and control of the
Director
of Mines and shall be charged with the administration of petroleum
lands,
the preparation of forms and regulations, the settlement of disputes,
and
the enforcement of the provisions of this Act with the advice of the
Technical
Board.
The
Technical Board shall consist of at least one petroleum engineer and
one
petroleum geologist, with the Director of Mines ex-officio chairman
thereof.
The said Board shall have, among others, the following functions:
(a)
To act in an advisory or consultative capacity on different
technological
matters relative to the administration and disposition of petroleum
lands
under this Act, and on petroleum operation and industry;
(b)
To look into the qualifications of applicants for concessions under
this
Act;
(c)
To recommend whether or not lands within the National Reserve Areas
shall
be offered for concession and in case it is so offered, to study all
applications
for concessions within said areas with a view to determining the
relative
merits thereof and to submit to the Secretary of Agriculture and
Natural
Resources its findings and recommendations thereon;
(d)
To determine the relative merits of the conflicting applications for
concessions
covering lands within Free Areas;
(e)
To check on the performances of concessionaires and to determine
whether
the obligations imposed by this Act and the Regulations promulgated
thereunder
are being complied with;
(f)
To determine the maximum efficient rate of withdrawal from each well or
oil field;
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(g)
To supervise production operations to insure conservation of reservoir
energy and the optimum recovery from the petroleum deposits in the
different
oil fields;
(h)
In general, to study ways and means to insure the efficient
administration
of petroleum lands and the effective enforcement of the provisions of
this
Act and the Regulations;
(i)
To keep and maintain a complete record as possible on all phases of
exploration,
development and production of petroleum in the Philippines, including
but
not limited to geological and geophysical data, well and production
records,
petroleum engineering studies, computation of petroleum reserve and to
prepare therefrom such reports, articles, and bulletins as may be
deemed
necessary for the proper information of the Government and/or the
public.
ARTICLE
96. Funds for salaries and expenses. For the expenses,
including
salaries and wages of the personnel, of the Administration Unit and of
the Technical Board authorized to be created in accordance with article
ninety-five of this Act, a sum of two hundred thousand pesos is hereby
appropriated from the funds of the National Treasury not otherwise
appropriated.
Hereafter the same shall be included in the General Appropriation Act.
CHAPTER
XFINAL
PROVISIONS ARTICLE
97. Bond for performance. Prior to the issuance of a
concession,
except the Non-Exclusive Exploration Permit, the concessionaire shall
post
a bond in favor of the Government in the sum to be fixed by the
Regulations
and with surety or sureties satisfactory to the Secretary of
Agriculture
and Natural Resources, conditioned upon the faithful performance by the
concessionaire of any or all of his obligations under the concession.
ARTICLE
98. Share of private landowners. In case an Exploration or
Exploitation
Concession covers, in whole or in part, private lands title to which
has
been finally adjudicated by a court of competent jurisdiction, the
exploration
or exploitation tax due to the Government for the area of such private
lands, shall be reduced by ten per cent of the same, which reduction
shall
be the landowner's share. In the case of lands title to which has not
been
finally adjudicated all the exploration and exploitation tax for said
areas
due to the Government shall be paid to the Collector of Internal
Revenue
or his duly authorized deputy, subject to the rule and regulations of
the
Bureau of Internal Revenue. In any case, the right of private owner to
recover ten percent share when and if his title shall have been finally
adjudicated in his favor shall be respected and for such purpose the
Government
shall hold the same until such title has been so finally adjudicated.
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ARTICLE
99. National emergency measures. Concessions granted under
this
Act shall be subject to the rights of the Government, in case of and
during
the period of war or national emergency, to pass such lawful measures,
as it may consider necessary, requisitioning for its use and/or
restricting
the sale or disposal of all products produced under the terms of the
concessions
and/or interfering with the free movement thereof, upon just
compensation
paid to the concessionaires.
ARTICLE
100. Disposition of substances other than petroleum. In the
event
that substances other than petroleum, as defined in article two, should
occur naturally and be produced with petroleum, the exploitation
concessionaire
may separate such other substances at his own expense; Provided,
That in the event that any such other substances be sold, the value
thereof
shall be taken into account in fixing the value of petroleum for the
purpose
of liquidating royalty in cash as provided in article sixty-eight: And
Provided, further, That if the Secretary of Agriculture and
Natural
Resources elects to receive such other substances in kind the
concessionaire
shall, upon request of the Secretary of Agriculture and Natural
Resources,
separate and deliver to the Government such substances through the
facilities
of the concessionaire and at the expense of the Government.
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ARTICLE
101. Helium rights reserved. The Government reserves the right
to
take all helium from any gas produced by the concessionaire and the
right
to erect, maintain, and operate on lands covered by the concession, all
reduction works and other equipment necessary for the extraction of
helium.
The Secretary of Agriculture and Natural Resources shall prescribe the
necessary rules and regulations governing the delivery to the
Government
of gas containing helium for the extraction thereof.
ARTICLE
102. Work obligations, taxes, royalties not to be changed. Work
obligations, special taxes and royalties which are fixed by the
provisions
of this Act or by the concession for any of the kinds of concessions to
which this Act relates, are considered as inherent on such concessions
after they are granted, and shall not be increased or deceased during
the
life of the concession to which they apply; nor shall any other special
taxes or levies be applied to such concessions, nor shall
concessionaires
under this Act be subject to any provincial, municipal, or other local
taxes or levies; nor shall any sales tax be charged on any petroleum
produced
from the concession or portion thereof, manufactured by the
concessionaire
and used in the working of his concession. All such concessionaires,
however,
shall be subject to such taxes as are of general application, in
addition
to taxes and other levies specifically provided in this Act.
ARTICLE
103. Customs duties. During the first five years following the
granting
of any concession, the concessionaire may import free of customs duty,
all equipment, machinery, material, instruments, supplies and
accessories.
No
exemption shall be allowed on goods imported by the concessionaire for
his personal use or that of any others; nor for sale or for re-export;
and if any goods on which exemption has been allowed be thus used or
disposed
of, the concessionaire is obliged to make a report to the Secretary of
Agriculture and Natural Resources to that effect and to pay such import
duty as is due.
ARTICLE
104. No export tax to be imposed. No export tax shall be levied
upon petroleum produced from concessions granted under this Act.
ARTICLE
105. Compulsory collection. In the event of failure by a
concessionaire
to pay any tax or royalty due under the provisions of this Act within
six
months of the date upon which they are due, the Government may resort
to
compulsory collection under the provisions of applicable laws.
ARTICLE
106. Inspection of operations and examination of books and accounts.
The Secretary of Agriculture and Natural Resources and the Director of
Mines shall have authority to send their delegates or representatives
to
inspect any operations of the concessionaire at all reasonable times
and
to examine all the books and accounts pertaining to operations or
conditions
related to payment of taxes and royalties under this Act, and to carry
out any other inspections authorized by law.
The
concessionaire shall furnish to such delegates or representatives all
technical
and accounting data specified in the Regulations, and shall give them
ample
facilities and assistance to discharge their duties as such
representatives
and inspectors.
For
the purpose of enabling proper examination as provided for in this
article,
each concessionaire shall be obligated to retain within the country all
original records or original carbon copies thereof which are essential
for the purpose of determining the amount of taxes and royalties due to
the Government, except as may be agreed upon between the Secretary of
Agriculture
and Natural Resources and the concessionaire.
ARTICLE
107. Settlement of disputes by agreement. For the purpose of
settling
or terminating any controversy arising out of the provisions of this
Act,
other than those arising out of conflict of applications, the Secretary
of Agriculture and Natural Resources is authorized, to enter into
agreement
with any petroleum concessionaire, and in case of their failure to come
to such an agreement, the Secretary of Agriculture and Natural
Resources
shall render his decision thereon, from which decision the
concessionaire
adversely affected thereby, may bring the matter to the court of
competent
jurisdiction within forty-five days from the date of his receipt of a
copy
of said decision. Failure to take such action within the said period,
shall
make such decision final and binding upon the concessionaire.
Such
agreement between the Secretary of Agriculture and Natural Resources
and
a concessionaire may be reached either with or without the intervention
of arbitrators selected by the parties to the controversy.
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ARTICLE
108. Definition of "waste." The term "waste" shall
specifically
include among other things the following:
(a)
The operation of any petroleum well or wells with an inefficient
gas-oil
ratio.
(b)
The drowning with water of any stratum or part thereof capable of
producing
oil or gas, or both oil and gas, in paying quantities.
(c)
Permitting any natural gas well to burn wastefully.
(d)
Physical waste or loss incident to, or resulting from, so drilling,
equipping,
locating, spacing, or operating well or wells as to reduce or tend to
reduce
the total ultimate recovery of crude petroleum oil or natural gas from
any pool.
(e)
Waste or loss incident to, or resulting from, the unnecessary,
inefficient,
excessive or improper use of the reservoir energy, including the gas
energy
or water drive, in any well or pool.
(f)
Surface waste or surface loss, including the storage either permanent
or
temporary of crude petroleum or the placing of any product thereof, in
open pits or earthen storage, and all other forms of surface waste or
surface
loss, including unnecessary or excessive surface losses, or destruction
without beneficial use, either of crude petroleum or of natural gas.
(g)
The production of crude petroleum or natural gas in excess of
transportation
or market facilities or reasonable market demand.
ARTICLE
109. Prevention of waste. All concessionaires, operators,
contractors,
or drillers, pipe line companies, petroleum refining companies, or gas
distributing companies, drilling for or producing petroleum or
petroleum
products, or piping petroleum for any purpose, shall use every possible
precaution in accordance with the most improved methods to stop and
prevent
waste of petroleum or natural gas in drilling and producing operations,
storage or in piping or distributing, and shall not wastefully utilize
petroleum or natural gas or allow same to leak or escape from natural
reservoirs,
wells, tanks, containers, or pipes.
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ARTICLE
110. Rules and regulations regarding conservation of petroleum. Rules
and regulations may be issued which shall require concessionaires to
utilize
in their exploration and exploitation operations the latest and most
improved
methods and devices to prevent waste in petroleum as well as to prevent
oil, oil-field brine or other oil-field contamination from causing
pollution
or otherwise damaging streams, surface or underground water supply, and
valuable mineral deposits. The Secretary of Agriculture and Natural
Resources
may also issue orders which shall control the rate of production from
any
well in the interest of conservation of the petroleum resources.
ARTICLE
111. Applications filed prior to approval of this Act. Applications
for geological exploration, petroleum drilling lease, concession, or
contract
of service, presented prior to the promulgation of this Act to the
Philippine
Oil Commission, the Secretary of Agriculture and Natural Resources, or
the Director of Mines, which applications have not been granted, or if
granted, had already expired, or are no longer in effect at the time
this
Act becomes effective, shall remain without effect.
ARTICLE
112. Transfer and assignment. Holder of concessions under this
Act
shall not, without previous written approval of the Secretary of
Agriculture
and Natural Resources, transfer or assign in whole or in part, their
rights
on their concessions: Provided, That no such transfer or
assignment
shall be made to a person who is not qualified to acquire or hold
concession
under this Act, or who shall hold a total area under exploration or
exploitation
concessions, including that being transferred or assigned to him, of
more
than the maximum areas allowed under this Act.
ARTICLE
113. Partial invalidity. If any clause, sentence, provision or
article
of this Act should for any reason be held to be invalid or
unconstitutional,
it shall not affect in anywise the remaining parts of this Act and such
remaining parts shall remain in full force and effect.
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ARTICLE
114. Repeal of laws, rules and regulations. All acts, laws,
rules
and regulations inconsistent with any of the provisions of this Act are
hereby repealed.
ARTICLE
115. Effective date. This Act shall take effect upon its
approval.
Approved:
June 18, 1949
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