Atty. Elpidio M. Gamboa, Jr.

June 26, 2002 SEC OPINION Atty. Elpidio M. Gamboa, Jr. PNOC Exploration Corporation PNOC Energy Companies Bldg., Merritt Road, Fort Bonifacio, Makati City Dear Atty. Gamboa, This pertains to your letter dated June 21, 2002 requesting confirmation of your opinion that PNOC Exploration Corporation (PNOC EC) is exempt from complying with the requirements of the Code of Corporate Governance, particularly (a) the creation of the committees; (b) the appointment of an external auditor; (c) the reportorial and disclosure system; and (d) the submission of the Manual by July 1, 2002. Previously, the Commission has issued an opinion to the effect that PNOC EC is exempt from complying with the registration, licensing, reportorial and other requirements of R.A. 8799 (Securities Regulation Code). P.D. No. 334 (PNOC Charter) provides thus: Sec. 5(g) . . . Where the company has a controlling interest of not less than fifty-one percent (51%) of the issued and outstanding capital stock of such subsidiaries, the securities, including shares of capital stock, issued by the subsidiaries and corporation owned and/or controlled by it, as well as the sale and/or subscription to such securities and shares of capital stock shall be exempt from registration, licensing or other requirements imposed under the Securities Act (C.A. 83, as amended), any other law, decree or order or regulation . (emphasis supplied) A careful reading of the aforequoted proviso clearly indicates that PNOC EC is likewise exempt from any law, decree or order or regulation which includes the Code of Corporate Governance. Very truly yours, (SGD.) JESUS ENRIQUE G. MARTINEZ Commissioner