Article 63p. 63

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

(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 II Concessions

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.

© 2018 Compiled by RGL

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