312.115 H 861/71: Telegram
The Secretary of State to the Chargé in Mexico (Summerlin)
203. Reference Department’s No. 2228, October 1, 4 p.m.,47 respecting issuance of drilling permits to American petroleum companies and denouncements accepted by Mexican authorities as filed by third persons on properties owned or leased by such companies.
Department informed that since date mentioned many more such denouncements have been accepted by Mexican authorities including some of very recent dates, and that upon lands covered by such denouncements American companies are forbidden to conduct drilling operations. An instance in point is reported to be the refusal to permit the Tamiahua Petroleum Company to drill for oil in the lands of the Hacienda of Zapotal Solis, all of which lands are said to have been leased to Company by contract still in force, and some to have been bought by Company since execution of lease.
Bearing in mind Department’s previous instructions relative to your communication with persons now exercising authority in Mexico, you will informally bring reported condition to attention appropriate person, referring specifically in connection therewith to representation made pursuant Department’s said telegram of October 1, 1919, and other previous representations against the threatened confiscation of American owned property through the medium of denouncements filed by third persons against such property, and you will point out that refusal of drilling permits under circumstances mentioned constitutes a deprivation of rights to which American concerns are entitled under deeds and leases held by them and applicable laws of Mexico at the time when such deeds and leases were acquired.
You will therefore state that the interested American companies should not be made to suffer loss or inconvenience because of the [Page 220] denouncements in question, but should be restored to all the rights to which they are entitled as above stated, including the right to conduct drilling operations on their properties. In this relation you will point out the wholesale character of the denouncements that have been filed, and that it would only be necessary for a sufficient number of denouncements to be filed to deprive American companies of the use of all of the lands which they have acquired by lease or purchase. The Mexican Governments attitude will of course have a bearing on future developments.