Definition of Exploration.
ART. 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.
Application for Exploration Concession.
ART. 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.
Map and technical descriptions.
ART. 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, Jakes, 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.
Application fee for Exploration Concession.
ART. 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.
Areas available for Exploration Concessions.
ART. 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 July first, nineteen hundred and two, as amended.
Size and shape of exploration blocks.
ART. 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.
Maximum exploration area a person may acquire.
ART. 44. Maximum exploration area a person may acquire.—No person shall be entitled to more than five hundred thousand hectares of exploration areas m 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.
Rights conveyed under Exploration Concession.
ART. 45. Rights conveyed under Exploration Concession.—The Exploration Concession conveys upon the con-cessionaire, 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.
Term of Exploration Concession.
ART. 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 Way 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 conces-sion, 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.
Exploration work obligations.
ART. 47. Exploration work obligations.—At the begin-ning 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 within 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:
Eighth to tenth year—Not less than three pesos I hectare per year, or fraction thereof.
The cost of delivered materials or equipment use 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 conces-sionaire.
Work obligations on two or more exploration blocks within any one petroleum region.
ART. 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.
Annual exploration tax.
ART. 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.
Renunciation of areas covered by Exploration Concession.
ART. 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.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
