AUTHORIZING THE SECRETARY OF ENERGY TO ENTER INTO AND CONCLUDE SERVICE CONTRACTS, OR RE-NEGOTIATE AND MODIFY EXISTING CONTRACTS SUBJECT TO CERTAIN LIMITATIONS

• Number: Presidential Decree No. 1459
• Sections: 3

Preamble

WHEREAS, it is the declared policy of the State to promote

an accelerated exploration, development, and production of indigenous petroleum

resources;

WHEREAS, there is need to re-examine existing contracts and

propose modifications thereto under certain conditions in the light of current

international developments in oil exploration and development in order to

further induce the active participation of service contractors, particularly,

foreign companies with management and financial capabilities and technical

expertise.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution, do hereby

decree and order the following:

Section 1

SECTION 1. Any provision of law to the contrary

notwithstanding, the Secretary of Energy is hereby authorized to enter into

petroleum service contracts, or re-negotiate and modify existing ones, upon the

approval of the President of the Philippines, subject to the following

conditions:

The share of the Government, including all taxes, shall not be less than

sixty per cent of the difference between the gross income and the sum of

operating expenses and such allowances as the Secretary of Energy may deem

proper to grant;

The service contractor must be technically competent and financially capable

to undertake the petroleum operations required in the contract; and

The Secretary of Finance shall be consulted on all matters involving

revenue.

Section 2

SEC. 2. This Decree shall take effect immediately.

DONE in the City of Manila this 8th day of June, in the year of Our Lord,

nineteen hundred and seventy-eight.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JACOBO C. CLAVE

Presidential Executive

Assistant