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PD 1442 - Development of Geothermal

The document is Presidential Decree No. 1442 which aims to promote the exploration and development of geothermal resources in the Philippines. It establishes that (1) the government can directly or indirectly explore, exploit, and develop geothermal resources through service contracts with domestic or foreign entities, (2) these service contracts may cover public, private, and agricultural lands and allow contractors certain privileges to facilitate operations, and (3) the Director of Energy Development is authorized to promulgate rules to implement the decree.

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127 views3 pages

PD 1442 - Development of Geothermal

The document is Presidential Decree No. 1442 which aims to promote the exploration and development of geothermal resources in the Philippines. It establishes that (1) the government can directly or indirectly explore, exploit, and develop geothermal resources through service contracts with domestic or foreign entities, (2) these service contracts may cover public, private, and agricultural lands and allow contractors certain privileges to facilitate operations, and (3) the Director of Energy Development is authorized to promulgate rules to implement the decree.

Uploaded by

Schuldich Schwarz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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MALACAANG

Manila

PRESIDENTIAL DECREE No. 1442

AN ACT TO PROMOTE THE EXPLORATION AND DEVELOPMENT OF GEOTHERMAL


RESOURCES

WHEREAS, it is necessary for the economic and industrial development of the country to
reduce our dependence on imported energy supplies and accelerate the development of
geothermal resources which have been identified as a viable and untapped economical
source of energy;

WHEREAS, it is in the national interest to allow service contracts for financial, technical,
management or other forms of assistance with qualified domestic and foreign entities, for the
exploration, development, exploitation, or utilization of the country's geothermal resources;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of


the powers vested in me by the Constitution of the Philippines, do hereby order and decree
as follows:

Section 1. Exploration of and Development of Geothermal Resources by the Government.


Subject to existing private rights, the Government may directly explore for, exploit and
develop geothermal resources. It may also indirectly undertake the same under service
contracts awarded through public bidding or concluded through negotiation, with a domestic
or foreign contractor who must be technically and financially capable of undertaking the
operations required in the service contract; Provided, that if the service contractor shall
furnish the necessary services, technology and financing, the service contractor may be paid
a fee not exceeding forty per centum (40%) of the balance of the gross value of the
geothermal operations after deducting the necessary expenses incurred in the operations;
Provided, further, that the execution of the activities and operations subject of the service
contract, including the implementation of the work program and accounting procedures
agreed upon, shall at all times be subject to direct supervision of the Government, through
the Bureau of Energy Development.

Service contracts as above authorized shall be subject to the approval of the Secretary of
Energy.

Geothermal resources mean (a) all products of geothermal processes, embracing indigenous
steam, hot water and hot brines; (b) steam and other gases, hot water and hot brines
resulting from water, gas, or other fluids artificially introduced into geothermal formations; (c)
heat or other associated energy found in geothermal formations; and (d) any by-product
derived from them.

Section 2. Geothermal Contract Areas. Service contracts, as herein authorized, may cover
public lands, government geothermal reservations, including those presently administered or
unappropriated areas, as well as areas covered by exploration permits or leases granted
under Republic Act No. 5092.

Service contracts for exploration and development of geothermal resources may also cover
private lands, or other lands subject of agricultural, mining, petroleum or other rights or
devoted to purposes other than the exploration or use of geothermal energy; Provided, that
the right to enter private lands, and to established easements over such lands shall, in the
absence of a voluntary agreement with the private landowner, upon application of the
contractor to the Court of First Instance of the province or the municipal court of the
municipality where the land is situated, and upon posting of the necessary bond as may be
fixed by the same court, be allowed by the court subject to payment of reasonable
compensation.

Section 3. Conversion of Geothermal Exploration Permits and Leases to Service


Contract. Holders of valid and subsisting geothermal exploration permits and geothermal
leases granted by the Government prior to January 17, 1973, pursuant to Republic Act No.
5092, shall enter into service contracts as herein provided relative to the areas covered by
their respective permits or leases within six months from the effective date of this Decree;
and, in default thereof, the geothermal exploration permits and geothermal leases shall be
deemed automatically canceled and the area covered thereby shall revert back to the State.

All geothermal exploration permit application filed under Republic Act No. 5092 shall be
deemed withdrawn and no effect as of the effective date of this Decree.

Section 4. Privileges of Service Contractors. The provisions of any law to the contrary
notwithstanding, a service contract executed under this Act may provide that the contractor
shall have the following privileges:

(a) Exemption from payment of tariff duties and compensating tax on the importation
of machinery and equipment, and spare parts and all materials required for
geothermal operations subject to such conditions as may be imposed by the Director
of Energy Development; Provided, that should the contractor or its sub-contractor
sell, transfer or dispose of the machinery, equipment, spare parts or materials
without the prior consent of the Bureau of Energy Development, it shall pay twice the
amount of the taxes and duties not paid because of the exemption granted;

(b) Entry, upon the sole approval of the Bureau of Energy Development which shall
not be unreasonably withheld, and subject to such conditions as it may impose, of
alien technical and specialized personnel (including the immediate members of their
families), who may exercise their professions solely for the operations of the
contractor as prescribed in its contract with the Government under this Act;

(c) Subject to the regulations of the Central Bank, repatriation of capital investment
and remittance of earnings derived from its service contract operations, as well as
such sums as may be necessary to cover principal and interest of foreign obligations
incurred for the geothermal operations.

(d)Other privileges provided in Section 12 of Presidential Decree no. 87 as may be


applied to the geothermal operation.

Section 5. Exploitation Permits. In cases where discovered geothermal resources are


deemed inappropriate for service contracts arrangements in view of economic and/or
technical reasons, the Bureau of Energy Development may issue development and
exploitation permits for such resources and formulate the applicable rules and regulations to
govern the same.
Section 6. Rules and Regulations. The Director of Energy Development shall be vested with
the authority to promulgate such rules and regulations as may be necessary to implement
the provisions of this Act, subject to approval by the Secretary of Energy.

Section 7. Repealing Clause. The provisions of Republic Act No. 5092 and other laws, rules
and regulations inconsistent with this Decree are hereby repealed.

Section 8. Effectivity. This Decree shall take effect immediately upon approval.

Done in the City of Manila, this 11th day of June, in the year of Our Lord, nineteen hundred
and seventy-eight.

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