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Administrative Order No. 381
ADMINISTRATIVE ORDER NO. 381 PROVIDING FOR THE FULFILLMENT BY THE NATIONAL POWER CORPORATION OF ITS OBLIGATIONS UNDER THE AGREEMENT FOR THE SALE AND PURCHASE OF NATURAL GAS DATED DECEMBER 30, 1997 WITH SHELL PHILIPPINES EXPLORATION B.V./OCCIDENTAL PHILIPPINES, INC. AND THE COMPLIANCE OF THE NATIONAL GOVERNMENT, THROUGH THE DEPARTMENT OF FINANCE AND THE DEPARTMENT OF ENERGY WITH ITS PERFORMANCE UNDERTAKING THEREFOR AND OTHER PURPOSES.
SECTION 1. NPC is hereby authorized to make payments under the Take-or-Pay Quantity provisions in clause 9 of the GSPA for Natural Gas, whether delivered and taken or tendered for delivery and not taken. NPC shall adopt all necessary measures to maximize utilization of the TOPQ within the earliest possible period.
SEC. 2. The National Government, through the DOF, shall guarantee, under the terms of a “Performance Undertaking” to the Sellers, the payment of NPC’s financial obligations under the GSPA (or under the Facility to the extent such obligations are financed under the Facility) in consideration of fees to be paid by the Sellers to the DOF under such Performance Undertaking.
SEC. 3. The National Government, through the DOE, shall utilize the Net Government Share to satisfy the TOPQ provisions of the GSPA in respect of the part of such TOPQ that is in the excess of NPC’s Planned Generation Consumption as specified in Table 1 hereof.
SEC. 4. In the event that the Net Government Share from the DOE in a given Contract Years as defined in the GSPA is insufficient to pay for the Natural Gas not taken but payable under the TOPQ provisions of the GSPA that is in excess of NPC’s Planned Generation Consumption, NPC is hereby authorized to avail itself of the Deferred Payment Facility. In addition to the purposes set out in Section 3 hereof, the Net Government Share for the succeeding Contract Years shall be used to pay the Sellers for any amounts outstanding under the Facility.
SEC. 5. Pursuant to Section 44, Chapter 5, Book VI, of the Revised Administrative Code of 1987 (Executive Order No. 292), a Special Net Government Share Account (the “Account”) is hereby created with the Bureau of the Treasury to be sourced from Net Government Share in the proceeds of all petroleum, natural gas and geothermal service contracts, and coal operating contracts of the Government, other than SC 38, under P.D. No. 87, as amended, and other pertinent legislation.
SEC. 6. The Account shall be used to pay the Sellers any amounts outstanding under the Facility or due under the Performance Undertaking in respect of Natural Gas not taken that is in excess of NPC’s Planned Generation Consumption but payable by NPC under the TOPQ provisions of the GSPA.
SEC. 7. In the event that (I) the Net Government Share, (II) the Facility and (III) the funds contained in the Account are insufficient or not available for the purposes set forth in Sections 3, 4, and 6 hereof, or other obligations arise under the Performance Undertaking, the balance of the amounts due to the Sellers under the Performance Undertaking shall be paid from other available government sources or funds.
SEC. 8. As soon as NPC is able to utilize Annual Deficiencies, NPC shall pay the DOE the value of the Annual Deficiencies so utilized by NPC to the extent such Annual Deficiencies have been paid by the DOE from the Net Government Share.
SEC. 9. The DOF, DOE and NPC are hereby authorized to enter into any agreements necessary to implement the provisions of this Order.
SEC. 10. The DOF and DOE shall have joint primary jurisdiction over any issue or controversy which may arise from the interpretation of this Order and of other inter-agency agreements which may be executed pursuant hereto, without prejudice to the dispute resolution provisions contained in the GSPA, the Facility and the Performance Undertaking.
SEC. 11. Should any portion or provision of this Order be declared unconstitutional, illegal or contrary to law, the remaining portions or provisions unaffected by such a ruling shall continue to remain in force and in effect.
SEC. 12. This Order shall take effect immediately upon issuance. DONE in the City of Manila, this 17 th day of Feb, in the year of Our Lord, nineteen-hundred and ninety-eight. (Sgd.) FIDEL V. RAMOS President of the Philippines By the President: (Sgd.) ALEXANDER P. AGUIRRE Executive Secretary