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June 7, 2006VAT RULING NO. 007-06Baniqued & BaniquedSuite 803, 8/F Jollibee CentreSan Miguel AvenueOrtigas CenterPasig City  Attention: Atty. Carlos G. BaniquedandAtty. Terence Conrad H. BelloGentlemen :This refers to your letter dated December 20, 2005 stating that your clients, SHELL PHILIPPINES EXPLORATION B.V. (SPEX),SHELL PHILIPPINES LLC (SPL),CHEVRON MALAMPAYA LLC (CHEVRON) and PNOC EXPLORATION CORPORATION (PNOC-EC) (collectively referred to as the Service Contractor or Consortium) are service contractors of the Government of the Republic of the Philippines, through the Department of Energy (DOE) under Service Contract 38 (SC 38) for the exploration, development and utilization of petroleum in the Camago-Malampaya field located in offshore Northwest Palawan (the Malampaya Project) executed by the parties on December 11, 1990, where SC 38 was signed by then President Corazon C. Aquino for and on behalf of the Republic of the Philippines; that on April 30, 1998 following the discovery and appraisal of natural gas reserves in the San Martin and Malampaya reservoirs, the Service Contractor entered into a Joint Declaration of Commerciality with the Government of the Republic of the...