AUTHORIZING THE SECRETARY OF ENERGY TO ENTER INTO AND CONCLUDE SERVICE CONTRACTS, OR RE-NEGOTIATE AND MODIFY EXISTING CONTRACTS SUBJECT TO CERTAIN LIMITATIONS

WHEREAS, it is the declared policy of the State to promote
an accelerated exploration, development, and production of indigenous petroleum
resources;

WHEREAS, there is need to re-examine existing contracts and
propose modifications thereto under certain conditions in the light of current
international developments in oil exploration and development in order to
further induce the active participation of service contractors, particularly,
foreign companies with management and financial capabilities and technical
expertise.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
decree and order the following:

SECTION 1. Any provision of law to the contrary
notwithstanding, the Secretary of Energy is hereby authorized to enter into
petroleum service contracts, or re-negotiate and modify existing ones, upon the
approval of the President of the Philippines, subject to the following
conditions:

1. The share of the Government, including all taxes, shall not be less than
   sixty per cent of the difference between the gross income and the sum of
   operating expenses and such allowances as the Secretary of Energy may deem
   proper to grant;
2. The service contractor must be technically competent and financially capable
   to undertake the petroleum operations required in the contract; and
3. The Secretary of Finance shall be consulted on all matters involving
   revenue.

SEC. 2. This Decree shall take effect immediately.

DONE in the City of Manila this 8th day of June, in the year of Our Lord,
nineteen hundred and seventy-eight.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JACOBO C. CLAVE
		Presidential Executive Assistant