To relinquish the portion of the contract area under Moratorium, without further commitment or obligation.
Exclusion of Areas Sub-Phases The Exploration Phase is divided into Sub-Phases, the number of which is to be agreed upon by the Contractor and the Department. Under the model contract, the parties shall identify under which Sub-Phases the Contractor is required to surrender, first, at least 25% of the initial contract area, and thereafter, another additional area equal to at least 25% of the initial contract area. Within thirty (30) days prior to the date of each relinquishment, the Contractor shall submit to the Department a written report on its completed Exploration Operations on the areas to be relinquished, including a map showing the areas to be relinquished with the coordinates of the connecting points of the boundary lines.
When is the Contractor allowed to retain a portion of the contract area? The Contractor is allowed to retain 12.5% of the initial contract area for further exploration and development if Petroleum in Commercial Quantity is discovered during any Sub-Phase of the Exploration Period or any extension thereof. The Contractor shall submit Work Program and Budget—subject to DOE approval—for the area to be retained. The Contractor shall pay to the Department an amount equivalent to One Hundred Pesos (PhP 100.00) per hectare of the retained area, which will be treated as annual rentals on the retained area. These annual rentals shall be offset by the amount spent by the Contractor for exploration on such retained area during the contract year. Failure of the Contractor to implement the Work Program as approved by the Department in any contract year will cause the automatic surrender of the retained area to the Department.
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