Article 71p. 71

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

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.

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

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