PSE Circular for Brokers No. 2318-98

October 7, 1998 PSE CIRCULAR FOR BROKERS NO. 2318-98 October 5, 1998 Ms . Grace B . de Guia Supervisor/Disclosure Department Philippine Stock Exchange PSE Center, Exchange Road Ortigas Center, Pasig City Dear Ms. de Guia : This has reference to your faxed letter dated October 2, 1998 seeking clarification or confirmation regarding a news article entitled "PNOC plans 15% stake in Malampaya project" which appeared on page B2 of the Philippine Daily Inquirer on October 2. Please be informed that PNOC Exploration Corporation's (PNOC-EC) participation in the Camago-Malampaya Gas-to-Power Project has yet to be firmed up as no formal discussions have resumed with Operator Shell Philippines Exploration. LLpr PNOC EC's initial discussions with Shell have also been overtaken by events, foremost of which was the take over by another Shell company over the interests of Occidental Petroleum in Service Contract No. 38. PNOC-EC is nonetheless seeking a broader range of cooperation with Shell including possible participation in Service Contract No. 38 and in other areas of mutual interest and cooperation particularly the downstream natural gas sector. We hope this clarify the matter. Thank you and best regards. Very truly yours, (SGD.) ELPIDIO M. GAMBOA, JR. General Counsel and Corporate Secretary