SECTION 1. Sections 2, 3, 4, 5, 6, 8, 11 and 12 of
Presidential Decree No. 334 are hereby amended to read as
follows:
"SECTION 2. Declaration of Policy.—It is the
declared policy of the State to promote industrial and over-all
economic development through the effective and efficient utilization of
energy sources, including oil and oil-based resources. In line with this
policy, the establishment of an organized entity is necessary in order
to assure adequate supply of oil and oil products as well as power and
energy to all users and consequently finable the unimpeded and efficient
growth of the economy.
"SECTION 3. Creation, Name, Domicile and term.—There
is hereby created a body corporate to be known as the Philippine
National Oil Company, hereinafter referred to as the "Company," which
shall undertake and transact the corporate business relative primarily
to oil or petroleum operations and other energy resources exploitation
as defined hereunder, and for that purpose, the Company shall have
capacity to sue and be sued.
"Oil or Petroleum Operations" shall include actual exploration,
production, refining, tankerage and/or shipping, storage, transport,
marketing, and related activities concerning oil and petroleum products.
"Energy resources exploitation" shall include exploration,
discovery, development, extraction, utilization, refining, processing,
transport, and marketing of all forms of energy resources. "Energy
resources" means any substance, mineral or otherwise, which by itself or
in combination with other substances or after processing or refining or
the application to it of technology emanates, gives off, generates or
causes, the emanation or generation of heat or power or energy such as,
but not limited to, petroleum or oil, coal, marsh gas, methane gas,
geothermal sources of heat and power, uranium and other minerals and
fossils deposits.
The principal office of the Company shall be determined by its
Board of Directors. It may establish such offices, agencies,
subsidiaries, branches or correspondents in the Philippines or abroad as
its business operations would require.
The Company shall have a term of fifty (50) years from the
issuance hereof, which shall be deemed renewed for an equal period
unless sooner dissolved by law.
"SECTION 4. Purposes.—The company shall have the
following purposes:
To provide and maintain an adequate and stable
supply of oil and petroleum products for the domestic
requirement and for that purpose to engage in, control,
supervise and regulate the transportation, storage,
importation, exportation, refining, supply, sale and distribution
of crude oil, refined petroleum and petroleum based products,
whether imported or produced by local refineries;
To promote the exploration, exploitation and
development of local oil, petroleum and other energy resources;
To foster conditions relating to oil or petroleum
operations and other energy resources exploitation conducive to
a balanced and sustainable growth of the economy.
"SECTION 5. Powers and Functions of the Company.—The
Company shall have the following powers and functions:
To undertake, by itself or otherwise, exploration,
exploitation and development of all energy resources of the country,
including surveys and activities related thereto;
To establish, maintain, control and direct in any area
within the national territory as it may deem appropriate, a petroleum
and energy base territory and construct, install or maintain therein
duty-free ports adequate for the use of vessels engaged in offshore
oil drilling operations, airports sufficient for direct service
flights, telecommunications center and ship-to-shore communications
facilities, provide electric power and fresh water supply, and
perform such other acts as it may deem necessary and advantageous or
convenient to such operations;
To lease, at reasonable rates, to private domestic
entities or persons such portion or portions of the petroleum and energy
base, including facilities necessary for warehousing, logistical
centers for the storage of oil drilling and oil well supplies,
fabrication of off-shore drilling components and structures,
mechanical repair facilities and the like; spaces for the
office, habitation and recreational requirements of personnel
directly engaged in offshore oil drilling and in manning the various
logistical support operations and their immediate dependents;
To undertake all other forms of petroleum or oil operations
and other energy resources exploitation;
To enter into contracts, with or without public
bidding, with any person or entity, domestic or foreign, and with
governments for the undertaking of the varied aspects of oil or
petroleum operation, and energy re sources exploitation including
the acquisition, by way of purchase, lease or rent or other deferred
payment arrangements of equipment and or raw materials and sup plies,
as well as for services connected therewith under such terms and
conditions as it may deem proper and reasonable;
To borrow money from local and foreign sources as may be
necessary for its operations;
Any provision of law to the contrary notwithstanding,
including but not limited to Section 13 of Act 1459, as amended, to
invest its funds as it may deem proper and necessary in any activity
related to its purposes, including in any bonds or securities issued and
guaranteed by the Government of the Philippines and the Company may
organize and incorporate subsidiary corporations for the
purpose. The capital stock of corporations organized and
incorporated by the Company may be subscribed in whole or in part,
by the Company. Where the Company has a controlling interest of
not less than fifty-one per cent (51%) of the issued and outstanding
capital stock, of such subsidiaries, the securities, including shares of
capital stock issued by the subsidiaries and corporations owned and/or
controlled by it, as well as the sale of and/or subscription to such
securities and shares of capital stock shall be exempt from
registration, licensing or other requirements imposed under the
Securities Act (C.A. No. 88, as amended) any other law, decree, order or
regulation.
To purchase, hold, alienate, mortgage, pledge or otherwise
dispose of the shares of the capital stock of, or any bond, security of
other corporations or associations of this or any other country; and
while the owner of said stock, to exercise all the right of ownership,
including the right to vote thereon;
To hold lands and acquire rights over mineral lands in excess
of the areas permitted to private corporations, associations and persons
by statute;
To engage in export and import business of oil, petroleum,
other forms and sources of energy and their derivatives, as well as
in related activities;
To acquire assets, real or personal, or interest therein, and
encumber or otherwise dispose the same as it may deem proper and
necessary in the conduct of its business;
Subject to existing regulations, if it deems necessary, to
establish and maintain such communication system, whether by radio,
telegraph or any other manner, without the need of a separate franchise
therefor;
To determine its organizational structure, and the number and
salaries of its officers and employees;
To establish and maintain offices, branches, agencies,
subsidiaries, correspondents or other units anywhere as may be needed by
the Company and reorganize or abolish the same as it may deem proper;
To exercise the right of eminent domain as may be necessary
for the purpose for which the Company is created;
Subject to payment of the proper amount, to enter private
lands for the purpose of conducting geological or geophysical studies in
connection with petroleum, mineral and other energy resources,
exploration and exploitation;
To acquire easement over public and private lands necessary
for the purpose of carrying out any work essential to its petroleum
operations and energy resources exploitation, subject to payment of just
compensation;
To establish and maintain a technical educational system
for the sustained development of the necessary manpower to manage and
operate its affairs and business;
To adopt a code of by-laws to complement this
charter;
To adopt and use a corporate seal which shall be judicially
noticed;
To perform such acts and exercise such functions as may be
necessary for the attainment of the purposes and objectives herein
specified;
To promulgate such rules and regulations as may be necessary
to carry out the purposes of this Decree;
To perform such other functions as may be provided by law.
"SECTION 6. Governing Body.—The Company shall be
governed by a Board of Directors, hereinafter referred to as the "Board"
which shall be composed of nine (9) members to be appointed by the
President of the Philippines. The members of the Board shall serve for a
term of three (3) years or until their successors shall have been
appointed and qualified. In case of any vacancy in the Board, the same
shall be filled by the President of the Philippines for the expired
term.
No person shall be appointed as member of the Board unless he is
a natural born citizen of the Philippines, at least thirty-five (35)
years of age and of established integrity.
The Chairman of the Hoard, who shall be the chief executive
officer of the Company, as well as the President of the Company shall be
appointed by the President of the Philippines. The other officers of
the Company shall be appointed by the Board.
"* * *
"SECTION 8. Duties and Responsibilities of the
Chairman of the Board and President.—The Chairman of the Board and
the President shall exercise such powers and perform such duties as may
be provided in the By-Laws or as may be vested in them by the Board.
"* * *
"SECTION 11. Auditor.—Any provision of law to the
contrary notwithstanding, the Commission on Audit shall appoint, subject
to the approval of the Board, a representative who shall be the Auditor
of the Company and such personnel as may be necessary to assist said
representative in the performance of his duties. The salaries of the
Auditor and his staff shall be approved by the Board. The auditors of
corporations owned or controlled by the Company who shall be reputable
accounting and auditing firms shall be appointed by their respective
boards of directors.
"SECTION 12. Appointment, Control and Discipline of
Personnel— Any provision of law to the contrary notwithstanding, the
"Board," upon recommendation of the President of the Company, shall
appoint the officers and employees of the Company and its subsidiaries;
fix their compensation, allowances and benefits, their working hours and
such other conditions of employment as it may deem proper; grant them
leaves of absence under such regulations as it may promulgate;
discipline and/or remove them for cause; and establish and maintain a
recruitment and merit system for the Company and its affiliates and
subsidiaries."
