QuestionsQuestions (PRESIDENTIAL DECREE NO. 334)
PD No. 334 is known as the "Charter of the Philippine National Oil Company."
To promote industrial and overall economic development through the effective and efficient utilization of energy sources, including oil and oil-based resources, and to establish an organized entity to assure adequate oil and oil-product supply.
It is created as a body corporate named the Philippine National Oil Company, with capacity to sue and be sued, primarily for oil or petroleum operations.
The principal office shall be determined by its Board of Directors, and it may establish offices, agencies, subsidiaries, branches, or correspondents in the Philippines or abroad as needed.
Fifty (50) years from issuance, deemed renewed for an equal period unless sooner dissolved by law.
(1) Provide and maintain adequate and stable supply of oil and petroleum products for domestic requirement; (2) promote exploration, exploitation, and development of local oil and petroleum sources; and (3) foster oil/petroleum operational conditions conducive to balanced and sustainable economic growth.
Actual exploration, production, refining, tankerage and/or shipping, storage, transport, marketing, and related activities concerning oil and petroleum products.
Examples include: (1) exploring/exploiting/developing oil petroleum areas; (2) establishing petroleum base territories and related facilities (ports, airports, telecom, power, water); (3) leasing petroleum base portions to private entities for logistical/warehousing and related uses; (4) entering contracts (with or without public bidding); (5) borrowing money; (6) investing funds in related activities; (7) purchasing/disposing/mortgaging/pledging shares or securities of other corporations; (8) engaging in export/import of oil and derivatives; among others.
PNOC may establish, maintain, control, and direct a petroleum base territory and construct/install/maintain duty-free ports adequate for offshore drilling vessels, airports for direct service flights, telecommunications and ship-to-shore communication facilities, and supply electric power and fresh water for operations.
PNOC may enter into contracts with any person/entity, domestic or foreign, and with governments for varied aspects of oil/petroleum operations, including acquisition of equipment/raw materials and services, under terms it deems proper and reasonable, "with or without public bidding."
PNOC may exercise the right of eminent domain when necessary for its purposes (Sec. 5(o)). It may also enter private lands for geological/geophysical studies, subject to payment of the proper amount (Sec. 5(p)).
PNOC may acquire easement over public and private lands necessary for essential work in petroleum exploration and exploitation, subject to payment or reasonable considerations.
The Board has seven (7) members appointed by the President of the Philippines. They serve three (3) years or until successors are appointed/qualified; vacancies are filled by the President for the unexpired term.
Board members must be natural-born citizens of the Philippines, at least 35 years of age, and of established integrity.
The President of the Philippines appoints the Chairman of the Board and the President of the Company; the other officers are appointed by the Board.
It has capital stock divided into three (3) million no-par shares. Two (2) million shares are originally subscribed and paid by the Republic at P50 per share. The remaining one (1) million shares may be subscribed/payed for by the Republic or government financial institutions at values determined by the Board, but not less than P50 per share for the Republic shares.
The Secretary of Justice is the ex officio legal counsel of the Company and may designate a representative (Sec. 10). The Commission on Audit appoints an Auditor representative subject to Board approval, with salaries approved by the Board (Sec. 11).
(1) Officers and employees are not subject to the Civil Service Law, rules, and regulations; (2) they are exempt from the regulations of the Wage and Position Classification Office (Sec. 12).
PNOC may contract loans/credits/foreign currency/capital goods and other indebtedness, including from foreign governments and international financial institutions (Sec. 13). The Republic, through the President, may guarantee such loans absolutely and unconditionally as primary obligor (not merely surety), potentially exceeding RA 6142 limits; and government financial institutions (except specified ones) may guarantee certain transactions/obligations of the Company (Sec. 13 and 14).
An initial funding appropriation of Two Hundred Million Pesos (P200,000,000) is set aside and appropriated from the General Funds, not otherwise appropriated.