711.21/488: Telegram

The Minister in Colombia ( Philip ) to the Secretary of State

104 [122?]. Confidential. Department’s Aug. 21, 5 p.m. It is important that I be furnished with more complete information about the Department’s attitude [and?] opinion relative to the pending petroleum legislation in Colombia. I am assured by the President and other officials that all legitimately acquired rights will be respected. I judge that the law now being studied by the Congress will regulate the exploitation petroleum on lands which are the property of the Nation only, thus leaving aside the question of subsoil rights in privately owned lands. It seems to be generally taken for granted here that the Nation possesses and will claim the petroleum subsoil rights in lands belonging to it. Am I to understand that the Department would be opposed to a law based upon such a decision? As to private lands now owned by foreigners and Colombians there seems to be at this time no likelihood of the Government attempting to claim subsoil rights to the petroleum deposits therein nor does it seem probable that such an hypothesis could be substantiated by the Government if advanced.

The press announces that contract between the Government and the Tropical Oil Company was signed on the 25th instant. This involves transfer of petroleum concession on Government lands, formerly granted to De Mares, a Colombian citizen. The Government leases rights of oil exploitation to Tropical Company for thirty years for the equivalent of 10 per cent of the gross production. Contract stipulates that company acquires no true rights to petroleum or to subsoil or soil, only exploitation rights, and that it submits [Page 775] itself to articles 42 and 43 of the Fiscal Code, which involve agreement not to submit any claims through diplomatic channels save in case of denial of justice, et cetera.