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Highlights of Fiscal Terms for PCR-1 |
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Contract Area
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2,000
sq km to 8,000 sq km
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Contract Term
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7 years exploration period
+ 3 years exploration period extension + 25 years production period
+ 15 years production period extension
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Signature
Bonus
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USD
50,000 to USD 150,000
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Production
Bonuses - Oil
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USD
300,000 at start of
production; USD 500,000 at 25,000 BOPD; USD 1M at 50,000 BOPD; and
USD 2 Million
at 75,000 BOPD
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Production
Bonuses - Gas
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$300,000 at start of
production, USD 500,000 at 130 MMBFOEPD; USD 1M at 260 MMBFOEPD; and
USD 2M at 400 MMBFOEPD.
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Royalties
- Oil
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None
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Royalties-Gas
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None
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Income Tax
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Tax rate: 32% - paid out
of Government share
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Cost Oil
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Cost oil Limit:
70% of gross income. Capital expenditures depreciated over 5 to 10
years.
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Cost Gas
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Same as oil.
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Profit Oil
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Profit oil share to
government: 60%. There is Filipino Participation Allowance of up to
7.5% of gross proceeds where the investor allows at least a 15%
participation by Filipino companies.
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Profit Gas
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Same as oil
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State Participation
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None
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Training Allowance
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USD
20,000 per year during exploration period (Cumulative); USD
50,000 per year during production period (Cumulative)
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Model Contract |
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Governing Laws and Issuances |
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Oil Exploration and Development Act
of 1972
The Act, conferred by Presidential Decree 87, provides the
legal basis for the exploration and development of
indigenous petroleum resources authorizing the grant of
service contracts entered into thru public bidding, or
through negotiations. |
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Presidential Decree 1857
This law amends certain sections of PD 87, offering
improved fiscal and contractual terms to service
contractors with special reference to deepwater oil
exploration. |
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DOE Circular No. 2003-05-005
This Circular establishes the procedures for the
Philippine contracting round in petroleum prospective
areas. |
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DOE Circular No. 2003-05-006
DC 2003-05-006 provides the guidelines to the financial
and technical capabilities of a viable petroleum
exploration and production company. |
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Executive Order No. 66
This order designates the Department of Energy as the
lead agency in developing the
natural gas industry. |
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DOE Circular No. 2002-08-005
The circular sets the interim rules and regulations
governing the transmission, distribution and supply of
natural gas. |
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Other Issuances |
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Philippine Environmental Policy
Act (Presidential Decree 1151)
Enacted in 1977, this act requires the government and
the private sector to undertake environmental impact
assessments of their project activities which may
significantly affect the quality of the environment. |
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Philippine Environmental Code
(P.D. 1152)
The Code provides a detailed prescriptions on the
management of air quality, water quality, land use,
natural resources and waste. |
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Environmental Impact Statement
System (P.D. 1586)
The decree which took effect in 1978 provides details on
Environmental Impact Statement (EIS) System. |
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National Integrated Protected
Areas System Act of 1992
The act, by virtue of Republic Act No. 7586, provides
for the establishment and management of national
integrated protected areas system, defining its scope
and coverage. Section 14 of the NIPAS Act specifies the
survey of energy resources in protected areas solely for
data gathering. Any exploitation and utilization of
energy resources found within NIPAS areas shall be
allowed only thru passage of law by Congress. |
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The Indigenous People's Rights Act
of 1997 (Republic Act 8371)
Establishes implementing mechanisms to protect and
promote the rights of indigenous cultural
communities/indigenous peoples. |
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Memorandum Agreement |
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The Indigenous People's Rights Act
of 1997 (Republic Act 8371) |
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