File No. 812.6363/170.
Vice Consul Bevan to
the Secretary of State.
No. 1354.]
American Consulate,
Tampico,
February 6, 1915.
Sir: I have the honor to acknowledge receipt
of the Department’s telegraphic instruction of January 25, 1915,
instructing this office to state to the appropriate authority [etc.]
I am transmitting herewith a copy of my letter to Señor J. Cabrera, Chief
of the Petroleum Inspectors, protesting against the application of such
requirements to American companies; also the official document sent by
Señor Cabrera to the representative of the Cortez Oil Corporation, and
the company’s reply to the same. Not only does the Government request
that this company agree to conform with laws not yet enacted, but they
desire strictly confidential geological information which costs
thousands of dollars to obtain and which can be had only by actual
drilling. The Government of the United States can not too strongly
protest against such illegal procedure against American companies, for
this would be a most dangerous precedent to establish.
All of the oil companies are awaiting developments. Practically all
drilling and construction work of all kinds has been closed down and a
large number of oil men have already returned to the United States.
I have [etc.]
[Page 876]
[Inclosure 1.]
Vice Consul Bevan
to the Chief of Petroleum
Inspectors.
American Consulate,
Tampico,
February 5, 1915.
Sir: With reference to your official
communication No. 43 dated February 3, 1915, addressed to the
Tampico representative of the Cortez Oil Corporation, which has been
referred to this Consulate, I have the honor to advise you that I
have received instructions from the Honorable Secretary of State of
the United States of America to advise you that this company should
not be expected to agree to conform with prospective laws and
regulations of the provisions of which the company has not been
informed; and that the United States Government protests against the
application of such requirements to American companies.
I have [etc.]
[Inclosure 2—Translation.]
The Chief of Petroleum
Inspectors to the Tampico
representative of the Cortez Oil
Corporation.
No. 43.]
Office of Petroleum Inspection,
Tampico,
February 3, 1915.
In reply to your letter of February 1 in which, as representative of
the Cortez Oil Corporation, you request permission to continue
drilling operations at your well, located in the Juan Casiano Oil
Zone, I advise you that permission of a provisional character is
granted to you pending approval by the Department of Fomento,
without which approval the operations shall again be suspended; and
I caution you that this permission binds the company you represent
to submit to the laws and regulations which the said Department will
soon issue, and to waive the right to allege retroactivity. I
further advise you that in order to exercise this permission it is
necessary that you send to this office the following data:
General map of the district;
Conditions of lease entered into between the company and the land
owner;
The present total depth;
Length and diameter of the casing now in the hole;
Map of the tract showing the location of the well, dams and tanks
constructed for storage, auxiliary buildings and ether structures,
together with specification of completed construction, construction
under way, and projected construction;
A geological chart, in a sealed and stamped envelope, bearing the
inscription “Strictly confidential” in order to guarantee the
interests of the company.
I am [etc.]
[Inclosure 3.]
The Tampico representative of
the Cortez Oil Corporation to the Chief of Petroleum Inspectors.
Tampico,
February 4, 1915.
I have received your communication No. 43 of February 3, 1915,
answering mine of February 1, wherein I, as representative of the
Cortez Oil Corporation, requested through you permission of the
Department of Fomento to place 6 in casing in the company’s well in
the Juan Casiano district and to deepen it sufficiently to set this
casing securely and properly cement it, the reason for this request
being that we are unable properly to cement the 8 in casing now in
the well and that there is imminent danger that the well in its
present condition will get beyond our control, causing great loss
and damage to the company, the surrounding oil country and the farms
in the vicinity.
[Page 877]
I have carefully noted your answer and especially the part which
says:
I advise you that permission of a provisional character is
granted to you pending approval by the Department of
Fomento, without which approval the operations shall again
be suspended; and I caution you that this permission binds
the company you represent to submit to the laws and
regulations which the said Department will soon issue, and
to waive the right to allege retroactivity.
The company at present has no representative in Mexico who has
sufficient authority to accept these conditions and the manager here
has had special instructions from the New York office to refer all
important matters to the head office in New York for approval before
acceptance. At the same time the company understands that it is
operating in Mexico and must certainly respect and abide by all the
laws of the country, and it has no intention of breaking or
gainsaying any of the laws of the country.
The local management of the company is very anxious to do the work on
the well; we have asked permission to do so because we realize the
imminent danger of the well getting away from us at any moment, and
we want to do everything in our power to avoid the losses and claims
for damage that would undoubtedly come up should the well get beyond
control. But we are afraid to start work on a provisional
permission, for two reasons:
- 1.
- It is very dangerous to do anything to the well at all
unless the work is to be finished, and we are afraid that
before the work is finished word might come that the
Department had not approved the provisional permission;
and
- 2.
- Article 2 of the Decree of January 7 especially says that
no legal permission will be recognized even if given by
legal authorities unless approved by the Department of
Fomento.
With regard to the date required, I am pleased to state the
following: General map of the district (attached);
Conditions of lease: Ten pesos per hectare per year rental until
production, when rental ceases and 10% of the product is paid;
Actual depth of well, 2,065 feet;
Surface casing, 15½ in., 177 feet; 8 in casing, 2,065 feet;
The general map has the location of the well marked thereon; exact
location of buildings we do not have but they are close to well on
north side;
We have almost finished earthen storage of 75,000 bbls capacity.
Geological information is in New York but will be sent to you as soon
as we receive the same.
As the company is not asking for a permit to continue old work or
begin new work but simply a permit to do some extra work on a
finished well so as to make it safe and avoid losses to itself and
others, again I beg you to please request by wire this permission
from the Department of Fomento, assuring you that the company, when
once they get the well secured, will keep it closed and await the
new laws that are shortly to be enacted.