OEA Circular No. 92-10-05 of 1992 Grant of Maximum Seven and One-half Percent (7-1/2%) Filipino Participation Incentive Allowance (7-1/2%) to Petroleum Service Contractors in Deep-water Contracts

Meta Data

Draft:

Revision of previous policy?:

Draft Year:

1992

Effective Start Year:

1992

Scope:

National

Document Type:

Other

Economic Sector:

Energy

Energy Types:

Oil

Issued by:

Office of Energy Affairs

Source:

Department of Energy

File:

OEA Circular No. 92-10-05 of 1992

Overall Summary:

A OEA Circular to grant of maximum seven and one-half percent (7-1/2%) Filipino Partcipation Incentive Allowance (FPIA) to petroleum service contractors in deepwater contracts.

Pricing

Fossil fuel subsidies:

[P]etroleum service contracts in which Filipino citizens or corporations have a minimum participating interest of fifteen percent (15%) in the contract area may, subject to reasonable conditions imposed by the Office of Energy Affairs (OEA), be granted a government subsidy commensurate with the scope of Filipino participation incentive not exceeding 7•% of the gross proceeds of petroleum sale.

Investment

Energy sector investment priorities:

[It] is the thrust of the government to encourage foreign as well as local corporations to accelerate the petroleum exploration and development of deepwater areas which have been recently proven to be highly prospective through grants of more incentives to interested participants therein.

Financial incentives for energy infrastructure:

Investment climate development:

Full Document Text

OEA CIRCULAR NO. 92-10-05

TO: ALL PETROLEUM SERVICE CONTRACTORS

GRANT OF MAXIMUM SEVEN AND ONE-HALF PERCENT (7-1/2%) FILIPINO PARTCIPATION INCENTIVE ALLOWANCE (FPIA) TO PETROLEUM SERVICE CONTRACTORS IN DEEPWATER CONTRACTS

WHEREAS, Sec. 28 o f P.D. No. 87, “An Act to Promote The Discovery and Production of Indigenous Petroleum, And Appropriating Funds Therefor,” grants that petroleum service contracts in which Filipino citizens or corporations have a minimum participating interest of fifteen percent (15%) in the contract area may, subject to reasonable conditions imposed by the Office of Energy Affairs (OEA), be granted a government subsidy commensurate with the scope of Filipino participation incentive not exceeding 7•% of the gross proceeds of petroleum sale.

WHEREAS, OEA Circular No. 87-12-003 dated December 1, 1987 provides for a schedule of percentage incentive of FPIA depending on the level of Filipino participation in the service contract which grants a maximum of 7 -• % allowance for a Filipino participation of 30% and a minimum of 1- • % allowance for a 15% Filipino participation.

WHEREAS, it is recognized that petroleum operations in deepwater areas entail greater risks and substantially higher costs which are more than double the expenditures incurred in shallow waters thus discouraging Filipino corporations to participate in such ventures.

WHEREAS, it is the thrust of the government to encourage foreign as well as local corporations to accelerate the petroleum exploration and development of deepwater areas which have been recently proven to be highly prospective through grants of more incentives to interested participants therein.

WHEREFORE, the foregoing premises considered, a maximum of seven and one-half percent (7-•%) Filipino Participation Incentives Allowance (FPIA) is hereby granted to deepwater petroleum service contractors with at least fifteen percent (15) Filipino participation.

This Circular shall take effect immediately.

06 October 1992, Makati, Metro Manila

RUFINO B. BOMASANG

Acting Executive Director