PLACING UNDER A SINGLE GOVERNMENT AUTHORITY ALL ACTIVITIES RELATING TO THE DISCOVERY, DEVELOPMENT AND PRODUCTION OF INDIGENOUS PETROLEUM RESOURCES.

WHEREAS, it is the declared policy of the state to hasten
the discovery, development and production of indigenous petroleum
through the utilization of government and/or private resources, local
and foreign, under arrangements embodied in Presidential Decree No. 87,
as amended, which will yield maximum benefit to the Filipino people and
revenues to the Philippine government for use in the furtherance of
national economic development, and to assure fair returns to
participating enterprises, particularly those that will provide the
necessary services, financing and technology, and fully assume all
exploration risks;

WHEREAS, it is essential in the interest of efficiency,
economy and maximization of efforts in carrying out the foregoing
national policy to integrate and coordinate in a single governmental
body the functions, responsibilities and regulatory powers of the
various agencies pertaining to oil exploration and development;

WHEREAS, a large portion of the country’s total land area
that has been delineated for petroleum exploration purposes is covered
by either subsisting petroleum exploration concessions or published
concession applications under the Petroleum Act of 1949;

WHEREAS, there is an urgent need to upgrade the work
obligations, financial commitments and service technology capabilities
of holders/applicants of petroleum exploration concessions under the
Petroleum Act of 1949 as amended;

WHEREAS, Article XVII, Section 12 of the Constitution of the
Philippines provides in part that when the national interest so
requires, the incumbent President of the Philippines or the interim
Prime Minister may review all contracts, concessions, permits or other
forms of privileges for the exploration, development, exploitation or
utilization of natural resources entered into, granted, issued, or
acquired before the ratification of the Constitution;

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

SECTION 1. The powers and duties vested in the Secretary of
Natural Resources (formerly Secretary of Agriculture and Natural
Resources) under Republic Act No. 387, as amended, otherwise known as
the Petroleum Act of 1949, particularly the provisions of Chapter IX
(Officials in Charge and Duties) thereof are transferred to the
Petroleum Board created under and pursuant to Presidential Decree No.
87, as amended. The functions of the Petroleum Division of the Petroleum
Technical Committee in the Bureau of Mines relative to the
implementation of Republic Act No. 387 as amended, together with
applicable appropriations, records, equipment and property are
transferred to the Petroleum Board.

SEC. 2. All holders of valid and subsisting petroleum
exploration concessions or published petroleum exploration concession
applications under the Petroleum Act of 1949, as amended, shall convert
their concession or concession application to a service contract under
the terms and provisions of Presidential Decree No. 87, either alone or
with any local or foreign oil company or companies within a period of
one (1) year from the effective date of this Decree. Any concession or
concession application not so converted for any cause within the said
one (1) year period shall be deemed automatically cancelled and the area
covered thereby shall become part of the National Reserve Area.

SEC. 3. Rules and regulations to govern the conversion
provided above shall be issued by the Petroleum Board.

SEC. 4. All laws, executive orders and regulations
inconsistent herewith are hereby repealed or modified accordingly.

SEC. 5. This decree shall take effect immediately.

Done in the City of Manila, this 25th day of August in the year of
Our Lord, nineteen hundred and seventy-five.