Article 74p. 74

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

constructed

by

the

concessionaire,

except

as

may

otherwise be agreed upon between the Secretary of

Agriculture

and

Natural

Resources

and

the

concessionaire, shall be available for public use.

ARTICLE 86.Pipe line concessionaire as common carrier.

— A pipe line concessionaire shall have the preferential

right to utilize his installations for the transportation of

petroleum owned by him, but is obligated to utilize any

remaining

transportation

capacity

pro

rata

for

the

transportation

of such other petroleum as may be

offered by others for transport, and to charge without

discrimination such rates as may have been approved by

the Secretary of Agriculture and Natural Resources.

When the pipe line concessionaire is also an exploitation

concessionaire, the Secretary of Agriculture and Natural

Resources may require that the royalty in kind of the

Government received from the same concessionaire, be

transported,

pro

rata,

with

that

owned

by

the

concessionaire from the same concession; and in all

cases the petroleum of the Government shall have

priority over all other petroleum in the utilization of the

excess capacity of the pipe line over that required to

transport

petroleum

owned

by

the

pipe

line

concessionaire.

Procedure

for

the

determination

of

pipe

line

transportation rates and the conditions governing the

transportation of petroleum other than that owned by

the concessionaire shall conform to the Regulations.

ARTICLE 87.Term of Pipe Line Concession. — The term of

a Pipe Line Concession shall not exceed twenty-five

years counted from the date of its issuance, renewable

for another twenty-five years, upon application of the

concessionaire filed prior to the expiration of the original

term.

ARTICLE 88.Renunciation of Pipe Line Concession. — Any

Pipe Line Concession may be renounced at any time,

except when the undertaking to build a pipe line is

imposed upon an Exploitation Concessionaire under the

provisions of article nineteen of this Act, in which case,

the renunciation shall be subject to the prior written

approval of the Secretary of Agriculture and Natural

Resources.

Renunciation extinguishes all rights granted by the

concession, but does not relieve the concessionaire from

making any payments due to the Government.

CHAPTER VIII Penalties and Extinction of

Rights

ARTICLE 89.Cancellation of concession for falsehood or

omission in application. — The statements made in the

application

or

made

in

support

thereof,

shall

be

considered as conditions and essential parts of the

concession that may be granted by virtue of such

application, and any falsehood in those statements or

omission of facts which may alter, change, or affect,

substantially the facts set forth in said statements may

cause the cancellation of the lease granted.

ARTICLE 90.Other causes for cancellation of concession.

— (a) Exploration Concessions may be cancelled under

any of the following causes:

1.For failure of the concessionaire to perform the work

obligations required by article forty-seven of this Act for

two consecutive years; and

2.For

failure

to

pay

for

two

consecutive

years the

exploration

tax

due thereon, as required by article

forty-nine of this Act.

(b)Exploitation Concessions may be cancelled under any

of the following causes:

1.For

failure

of

the

concessionaire

to

perform

the

exploitation work obligations as required under the

provisions of articles sixty and sixty-one of this Act, for

two consecutive years;

2.For suspending production operations for more than

six

months

without

prior

written

approval

of

the

Secretary

of

Agriculture

and

Natural

Resources

as

provided for in article sixty-two of this Act;

3. For failure to pay for two consecutive years the annual

exploitation tax due thereon, as required by article

sixty-four of this Act;

4.For failure to deliver or pay to the Government its

royalty within one year from the date such royalty

becomes due.

(c)Refining and Pipe Line Concessions may be cancelled

for

failure

of

the

concessionaire

to

begin

the

construction of a refinery and pipe line, as the case may

be, within one year from the date of the issuance of such

concessions.

ARTICLE 91. Procedure for cancellation. — Before any

concession is cancelled for cause or causes mentioned in

this Act, the concessionaire shall first be notified in

writing of such cause or causes, and shall be given an

opportunity to be heard, and to show cause why the

concession shall not be cancelled. If upon investigation,

the Secretary of Agriculture and Natural Resources shall

find the concessionaire to be in default, the latter shall

be given an opportunity to correct such default. If the

concessionaire shall continue to be so in default for a

period of ninety days from the date of the decision

finding him in default, the concession may be cancelled

in an order to that effect, copy of which shall be

furnished to the concessionaire, and which order shall

become final thirty days from receipt thereof, unless the

concessionaire

decides

to

take

advantage

of

the

provisions of Article one hundred seven of this Act, in

which case the concession shall continue to be in force

until, and if, a competent court or board of arbitrators

decides otherwise; and then the concessionaire shall

have ninety days after any such decision or award to

correct

the

default.

(Amendments

to

R.A.

No.

387

(Petroleum Act of 1949), Republic Act No. 3098, [June 17,

1961])

ARTICLE 92.Extinction of rights. — Rights acquired by

virtue of a concession granted under this Act shall

become extinguished upon the expiration of its term

including the extensions or renewals thereof, if any, or

upon

the

cancellation

or

renunciation

of

such

concession.

In the event of such extinction of rights, any sum payable

to the Government by the concessionaire and then

unpaid shall become due and payable forthwith, the

property of the concessionaire shall be disposed of in

accordance with the provisions of article ninety-three of

this

Act,

and

the

concession

contract

shall

be

surrendered to the Secretary of Agriculture and Natural

Resources.

ARTICLE 93.Title to areas, property, and equipment after

renunciation, cancellation, or expiration of a concession.

— (a) Upon the renunciation, cancellation, or expiration

of an Exploration or Exploitation Concession, the area

covered thereby shall automatically become part of the

National Reserve.

(b)Upon the renunciation, cancellation, or expiration of

an

Exploration

Concession,

or

of

an

Exploitation

Concession within the first term of twenty-five years or

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