DOE to seek ‘legislative articulation’ on Oil Exploration Act

In line with President Ferdinand Marcos Jr.’s marching order to incentivize investments in the upstream oil and gas industry, the Department of Energy (DOE) is proposing a new legislation that will clarify provisions of the Presidential Decree No. 87.

In his remarks during the Post-SONA Economic Briefing in Pasay City on Tuesday, Energy Secretary Raphael Lotilla said “the uncertainty over the interpretation of PD 87 allowing the service contractor’s corporate taxes to form part of the government’s 60% net share has hindered investments and roll out in this sector.”

The PD 87 or the Oil Exploration and Development Act of 1972, issued by late President Ferdinand Marcos Sr., provides that the government is entitled to equivalent of 60% of net proceeds from the sale of petroleum.

Marcos, in his first SONA, said the government “will provide investment incentives by clarifying the uncertain policy in upstream gas, particularly in the area close to Malampaya.”

Upstream refers to the exploration and production in the oil and gas sector. This involves surveying, drilling, and extracting oil and gas resources.

“He has, therefore, instructed that top priority be given to address decisively the uncertainties regarding investment incentives to the entire upstream sector, specially natural gas,” Lotilla said.

With this, the Energy chief said “the DOE will be submitting a clear articulation of that policy.”

“And in order to insure a stable investments regime across different administrations, we will seek legislative articulation of that policy,” he said.—AOL, GMA News