Guidelines for small marsh gas development

Section 2 allows application for a gratuitous permit by a citizen of the Philippines who is of legal age, has capacity to contract, and has not been convicted of any offense involving moral turpitude.
Section 2 allows application by an association of individuals in the form of partnership or corporations duly organized under Philippine laws.
Section 2 requires that at least 60% of the capital of the partnership or corporation is and shall at all times be held and owned by citizens of the Philippines.
Section 2 covers only the specified kinds of applicants applying for gratuitous permits to develop and utilize the covered gas deposits.

Section 3 requires applications for a gratuitous permit to be filed with the Director of Mines, Manila.
Section 3 requires a filing fee of PHP 20.00 for the application.
Section 3 provides that, upon compliance with the application requirements, the Director of Mines issues the permit.
Section 3 provides that the permittee must start development and utilization within the area of the permit for household use or small scale industrial development.
Section 3 limits a permittee to no more than one (1) permit for every petroleum region at any one time.
Section 3 limits the area for a gratuitous permit application to not more than twenty (20) hectares, in a block rectangular shape, with the larger sides not more than five times the shorter sides.

Section 4 permits a permit area to be validly covered by a subsequent petroleum exploration concession under the Petroleum Act of 1949, as amended, or by a service contract under Presidential Decree No. 87.
Section 4 prohibits the Director of Mines from issuing any gratuitous permit for an area already covered by an existing permit or lease granted under Republic Act No. 5092.
Section 4 prohibits issuance in accordance with the applicable rules and regulations promulgated under Republic Act No. 5092 for the relevant area coverage restrictions.
Section 4 prohibits issuance for areas where the natural gas or methane gas deposits are more than 1000 feet deep.
Section 4 prohibits issuance for areas where natural gas or methane gas deposits are associated with crude oil.

Section 5 grants the permittee the right to enter any private land covered by the permit to conduct work thereon.
Section 5 provides that if the landowner or legal occupant denies entry, the permittee may apply for permission to enter such land.
Section 5 requires the permittee to post such bond as may be fixed by the Director of Mines.
Section 5 provides that, after bond posting, the Director of Mines issues an order allowing entry pending the final determination of the proper amount to be paid to the landowner or legal occupant.

Section 6 requires the permittee to conduct operations on the permit area.
Section 6 requires the permittee to submit a monthly operations report to the Director of Mines for record and information.

Section 7 provides that the term of the permit is two (2) years from issuance.
Section 7 allows renewal for another like period upon compliance with the terms of the permit.
Section 7 allows an extension if production is attained within the four (4) years period, with extensions in series of 2-year periods.
Section 7 caps the maximum total permit duration at no case to exceed fourteen (14) years, if warranted by continuing gas production.
Section 7 provides that failure to conduct operations within one (1) year is a cause for cancellation of the permit.

Section 8 authorizes the Director of Mines to assume jurisdiction.
Section 8 charges the Director of Mines with carrying out the guidelines so that utilization and development are encouraged and properly regulated.
Section 8 requires the Director of Mines to prescribe the terms and conditions of the gratuitous permit to be issued.
Section 8 requires the Director of Mines to provide the necessary application form.

Section 9 defines “Natural Marsh Gas or Methane Gas” as a light, odorless, colorless, and inflammable gaseous hydrocarbon naturally occurring as a product of decomposition or organic matter in marshes and mines.
Section 9 defines “Free Areas” as all lands within the Philippines excluding lands submerged beneath bays, lakes, rivers or lagoons, while also excluding lands within or including national reserve areas, petroleum reservation, or areas covered by valid and existing exploration or exploitation concessions or petroleum drilling leases under the Petroleum Act (Act No. 2932), or petroleum mining claims under the Act of Congress of July 1, 1902, as amended.
Section 9 defines “National Reserve Areas” as areas included in concessions but subsequently given up under Article 50 and 53 of the Petroleum Act of 1949, as amended, areas covered by concessions that expired or were cancelled, and areas in excess of maximum allowed areas under the Petroleum Act of 1949, as amended.
Section 9 defines “Permittee” as a person, association, partnership, or corporation that holds a gratuitous permit to develop and utilize natural marsh gas or methane gas.

Section 10 provides that the Decree takes effect immediately.
The Decree is dated July 16, 1974, and done in the City of Manila on that date, sixteenth day of July in 1974.
The Decree is signed by FERDINAND E. MARCOS, President of the Philippines, with ALEJANDRO MELCHOR as Executive Secretary.