Presidential
Decree No. 927
FURTHER
AMENDING THE CHARTER OF THE
PHILIPPINE
NATIONAL OIL COMPANY (PNOC) AS PROVIDED FOR IN
PRESIDENTIAL DECREE NO. 334, AS AMENDED, AND FOR OTHER PURPOSES
WHEREAS, the
Philippine National Oil Company
was
organized principally to assure an adequate and stable supply of oil and
petroleum;
WHEREAS, the continuing increase in the cost of oil
and petroleum makes it imperative that the exploration and development of other
sources of energy be accelerated;
WHEREAS, the
Philippine National Oil Company is best
suited to undertake the task; at the same time, in order that the
Philippine National Oil Company may better
realize the purposes for which it has been organized and so that it may
continue to be an effective instrument in the attainment of national goals, it
necessary that its powers be broadened;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the
SECTION 1. Section 2, 3, 4, 5, 6, 8, 11, and 12 of
Presidential Decree No. 334 are hereby
amended to read as follows:
“SEC. 2. Declaration of Policy.
– It is the declared policy of the State to promote industrial and
over-all economic development through the effective and efficient utilization
of energy. In line with this policy,
the establishment of an organized entity is necessary in order to assure
adequate supply of oil and oil products as well as power and energy to all
users and consequently enable the unimpeded and efficient growth of the
economy.
“SEC. 3. Creation, Name, Domicile and Term. – There is hereby created a body corporate
to be known as the
Philippine National Oil Company,
hereinafter referred to as the “Company”, which shall undertake and transact
the corporate business relative primarily to oil or petroleum operations and
other energy resources exploitation as defined hereunder, and for that purpose,
the Company shall have capacity to sue and be sued.
“Oil or
Petroleum Operations” shall include actual exploration, production, refining, tankerage and/or shipping, storage, transport, marketing,
and related activities concerning oil and petroleum products.
“Energy
resources exploitation” shall include exploration, discovery, development,
extraction, utilization, refining, processing, transport, and marketing of all
forms of energy resources. “Energy
resources” means any substance, mineral or otherwise, which by itself or in
combination with other substances or after processing or refining or the
application to it of technology emanates, gives off, generates or causes, the
emanation or generation of heat or power or energy such as, but not limited to,
petroleum or oil, coal, marsh gas, methane gas, geothermal sources of heat and
power, uranium and other minerals and deposits.
The principal
office of the
Company shall be determined by its Board
of Directors. It may establish such
offices, agencies, subsidiaries, branches or correspondents in the
The
Company shall have a term of fifty (50)
years from the issuance hereof, which shall be deemed renewed for an equal
period unless sooner dissolved by law.
“SEC. 4. Purposes. – The
Company shall have the following purposes:
(a)
To provide and maintain an adequate and stable supply
of oil and petroleum products for the domestic requirement and for that purpose
to engage in, control, supervise and regulate the transportation, storage,
importation, exportation, refining, supply, sale and distribution of crude oil,
refined petroleum and petroleum based products, whether imported or produced by
local refineries;
(b)
To promote the exploration, exploitation and
development of local oil, petroleum and other energy resources;
(c)
To foster conditions relating to oil or petroleum
operations and other energy resources exploitation conducive to a balanced and
sustainable growth of the economy.
“SEC. 5. Powers and Functions of the
Company. – The
Company shall have the following powers
and functions:
(b)
To establish, maintain, control and direct in any
area within the national territory as it may deem appropriate, a petroleum and
energy base territory and construct, install or maintain therein duty-free
ports adequate for the use of vessels engaged in offshore oil drilling
operations, airports sufficient for direct service flights, telecommunications
center and ship-to-shore communications facilities, provide electric power and
fresh water supply, and perform such other acts as it may deem necessary and
advantageous or convenient to such operations;
(c)
To lease, at reasonable rates, to private domestic
entities or person such portion or portions of the petroleum and energy base,
including facilities necessary for warehousing, logistical centers for the
storage of oil drilling and oil well supplies, fabrication of off-shore drilling
components and structures, mechanical repair facilities and the like; spaces
for the office, habitation and recreational requirements of personnel directly
engaged in offshore oil drilling and in manning the various logistical support
operations and their immediate dependents;
(d)
To undertake all other forms of petroleum or oil
operations and other energy resources exploitations;
(e)
To enter into contracts, with or without public
bidding, with any person or entity, domestic or foreign, and with governments
for the undertaking of the varied aspects of oil or petroleum operation, and
energy resources exploitation including the acquisition, by way of purchase,
lease or rent or other deferred payment arrangements of equipment and/or raw
materials and supplies, as well as for services connected therewith under such
term and conditions as it may deem proper and seasonable;
(f)
To borrow money from local and foreign sources as may
be necessary for its operations;
(g)
Any provision of law to the contrary notwithstanding,
including but not limited to Section 13 of Act 1459, as amended, to invest its
funds as it may deem proper and necessary in any activity related to its
purposes, including in any bonds or securities issued and guaranteed by the
Government of the Philippines and the
Company may organize and incorporate
subsidiary corporations for the purpose.
The capital stock of corporations organized and incorporated by the
Company may be subscribed in whole or in a
part by the
Company.
Where the
Company has a controlling interest of not
less than fifty-one percent (51%) of the issued and outstanding capital stock
of such subsidiaries, the securities, including shares of capital stock, issued
by the subsidiaries and corporations owned and/or controlled by it, as well as
the sale of and/or subscription to such securities and shares of capital stock
shall be exempt form registration, licensing or other requirements imposed
under the Securities Act (C. A. No.
83, as amended) any other law, decree, order or regulation.
(h)
To purchase, hold alienate, mortgage, pledge or
otherwise dispose of the shares of the capital stock of, or any bond, security
of other corporations or associations of this or any other country; and while
the owner of said stock, to exercise all the rights of ownership, including the
right to vote thereon;
(i)
To hold lands and acquire rights over mineral lands
in excess of the areas permitted to private corporations, associations and
persons by statute;
(j)
To engage in export and import business of oil,
petroleum, other forms and sources of energy and their derivatives, as well as
in related activities;
(k)
To acquire assets, real or personal, or interest
therein, and encumber or otherwise dispose the same as it may deem proper and
necessary in the conduct of its business;
(l)
Subject to existing regulations, if it deems
necessary, to establish and maintain such communication system, whether by
radio, telegraph or any other manner, without the need of a separate franchise
therefor;
(m)
To determine its organizational structure, and the
number and salaries of its officer and employees;
(n)
To establish and maintain offices, branches,
agencies, subsidiaries, correspondents or other units anywhere as may be needed
by the
Company and reorganize or abolish the same
as it may deem proper;
(o)
To exercise the right of eminent domain as may be
necessary for the purpose for which the
Company is created;
(p)
Subject to payment of the proper amount, to enter
private lands for the purpose of conducting geological or geophysical studies
in connection with petroleum, mineral and other energy resources, exploration
and exploitation;
(q)
To acquire easement over public and private lands
necessary for the purpose of carrying out any work essential to its petroleum
operation and energy resources exploitation, subject to payment of just
compensation;
(r)
To establish and maintain a technical educational
system for the sustained development of the necessary manpower to manage and
operate its affairs and business;
(s)
To adopt a code of by-laws to complement this charter;
(t)
To adopt and use a corporate seal which shall be
judicially noticed;
(u)
To perform such acts and exercise such functions as
may be necessary for the attainment of the purposes and objectives herein
specified;
(v)
To perform such other functions as may be provided by
law.
“SEC. 6. Governing Body. – The
Company shall be governed by a Board of
Directors, hereinafter referred to as the “Board” which shall be composed of
nine (9) members, to be appointed by the President of the
No person
shall be appointed as member of the Board unless he is a natural born citizen
of the
The Chairman
of the Board, who shall be the chief executive officer of the
Company, as well as the President of the
Company shall be appointed by the
President of the
“SEC. 8. Duties and Responsibilities
of the Chairman of the Board and President. – The Chairman of the Board and the
President shall exercise such powers and perform such duties as may be provided
in the By-Laws or as may be vested in them by the Board.
xxx xxx xxx
“SEC. 11. Auditor. – Any provision of law to the contrary
notwithstanding, the
Commission on Audit shall appoint, subject
to the approval of the Board, a representative who shall be the Auditor of the
Company and such personnel as may be
necessary to assist said representative in the performance of his duties. The salaries of the Auditor and his staff
shall be approved by the Board. The
auditors of corporations owned or controlled by the
Company who shall be reputable accounting
and auditing firms shall be appointed by their respective boards of directors.
“SEC. 12. Appointment, Control and
Discipline of Personnel. –
Any provision of law to the contrary notwithstanding, the “Board”, upon
recommendation of the President of the
Company, shall appoint the officers and
employees of the
Company ands its subsidiaries; fix their
compensation, allowances and benefits, their working hours and such other
conditions of employment as it may deem proper; grant them leaves of absence
under such regulations as it may promulgate; discipline and/or remove them for
cause; and establish and maintain a recruitment and merit system for the
Company and its affiliates and
subsidiaries.”
SEC. 2. This Decree shall take effect immediately.
Done in the City of
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