Article 72p. 72

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

production to such markets; and deducting also the cost

of any processing or treatment which is necessary to

make the petroleum suitable for such transportation.

For this purpose the cost of transportation shall include

all

actual

costs

inherent

therein,

such

as

freight

according to the usual tariffs, port fees, storage costs,

pumping

costs,

and

the

costs

of

operating

and

maintaining the facilities provided expressly for such

transportation.

Similarly

the

cost

of

processing

or

treatment shall include all actual costs inherent therein,

such as for chemicals, stabilization, compression, and the

cost of operating and maintaining the facilities provided

expressly for such processing or treatment.

The Secretary of Agriculture and Natural Resources is

empowered

to

enter

into

agreement

with

the

concessionaire

for

the

purpose

of

determining the

market value of petroleum and the deductions to be

allowed in computing the market value at the place of

production, for the purpose set forth in this article.

ARTICLE 69.Acceptance of royalty payments. — Within

sixty days following the end of each month during which

the royalty has been paid in kind, or following the end of

each quarter in which royalty has been paid in cash, the

Secretary of Agriculture and Natural Resources shall

notify the concessionaire in writing that such payment is

accepted

in

full

discharge

of

the

corresponding

obligations as fixed by this Act; or that such is not the

case for certain stated reasons, in which latter case the

procedure fixed in the Regulations shall be followed for

the purpose of making any necessary corrections. Failure

of the Secretary of Agriculture and Natural Resources to

thus notify the concessionaire of objection to the royalty

payments made, within the foregoing time limits, shall

be

construed

as

acceptance

by

the

Secretary

of

Agriculture and Natural Resources of such payments.

Acceptance of royalty payments as provided for in this

article shall be deemed irrevocable.

ARTICLE

70.Field

storage

tanks

and

storage.

—

Exploitation concessionaire is obligated to construct and

maintain at, or in the vicinity of, the place or places of

production,

storage

tanks

of

sufficient

capacity

to

operate the producing field or fields in accordance with

good oil field practice.

The holder of such concession is under obligation to

store, for a period not in excess of thirty days, such

royalty in kind, free of expense to the Government.

Should the Government have no adequate facilities for

the handling and/or storage of such petroleum after said

period, the concessionaire shall supply facilities for the

handling and/or storage of the same for a reasonable

charge, which period and charge shall be as mutually

agreed upon between the Secretary of Agriculture and

Natural Resources and the concessionaire in advance:

Provided, That, in no event shall the concessionaire be

required to store beyond such thirty days more than one

hundred thousand barrels of such petroleum at any one

time, nor of any petroleum other than that produced

within the area held by the concessionaire.

ARTICLE 71.Exploitation concessionaire may be obliged

to refine crude oil in the Philippines. — The Secretary of

Agriculture

and

Natural

Resources

may,

after

due

investigation, require an exploitation concessionaire to

refine part or all of the crude oil produced in his

concession, in any refinery established in the Philippines

in accordance with the provisions of this Act: Provided,

That, there is such refinery with sufficient capacity and

adequate

facilities

to

handle

such

crude

oil

in

accordance with good refining practice: And provided,

further, That the quantity of such crude oil of the

concessionaire that may be required to be refined in the

Philippines in relation to the total net production from

his concession shall not exceed the proportional amount

that the total domestic requirements bear to the total

net

production

from

all indigenous sources in the

Philippines.

ARTICLE 72.Term of Exploitation Concession. — The term

of

an

Exploitation

Concession

shall

not

exceed

twenty-five years counted from the date of its issuance,

renewable for another twenty-five years at the option of

and upon application of the concessionaire made prior

to the expiration of the original term.

ARTICLE

73.Renunciation

of

areas

covered

by

exploitation concession. — The holder of an exploitation

concession, may, at any time, renounce the whole or any

part

of

the

total

area

covered

by

his

exploitation

concession. (Amendments to R.A. No. 387 (Petroleum

Act of 1949), Republic Act No. 3098, [June 17, 1961])

CHAPTER VI Refining Concession

ARTICLE 74.Definition of Refining. — The term "Refining"

means

the

processing or treating of petroleum by

chemical or physical means for the purpose of making or

separating marketable products; not including, however,

such operations, separate from the foregoing, as gas

compression,

removal

of

noxious

gases,

crude

oil

stabilization or treatment for emulsion, or any other

operation which has as its principalm the avoidance of

hazard or loss, or which is incidental to production or to

transportation.

ARTICLE

75.Application

for

Refining

Concession.

—

Application for Refining Concession shall be filed with

the

Director

of

Mines

in

accordance

with

article

twenty-eight of this Act.

When

the

granting

of

a

Refining

Concession

is

obligatory

upon

the

Government by reason of the

provisions of article eleven of this Act, and provided that

the requirements of this Act and of the Regulations have

been

complied

with,

an

application

for

Refining

Concession filed as provided in article twenty-eight shall

operate to confer upon the concessionaire all the rights

and obligations which are conferred by this Act through

such concession, pending the execution of the contract

of concession. The Secretary of Agriculture and Natural

Resources

may,

in

his

discretion,

grant

a Refining

Concession to any person duly qualified under the

provisions of this Act even though he is not a holder of

an

Exploitation

Concession.

Likewise

a

refining

concession may be granted to any person who, without

being a holder of an Exploitation Concession discovers

and registers with the Bureau of Mines under the

provision of article sixty-five hereof, any natural deposit

of oil or seep or emanation of gas.

ARTICLE

76.Refining

application

fee.

—

When

an

application

for

a

Refining

Concession

is

filed,

the

applicant shall pay an application fee of two 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.

ARTICLE 77.Rights conveyed under Refining Concession.

— Refining Concession confers upon the concessionaire

the

non-exclusive

right

to

provide facilities for the

manufacture

of,

and

to

manufacture,

petroleum

products, subject to the provisions of this Act; and to

carry out such auxiliary works and operations as are

essential to the successful conduct of the undertaking,

such as, but not limited to, the generation of steam and

electricity;

the

treatment

and

use

of

water;

the

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