No reply from the Mexican Government to the Embassy’s note of October 1,
last (a copy of which was enclosed with the despatch above mentioned)
has been received.
[Enclosure—Translation]
Official Statement Issued by the Mexican
Department of Industry, Commerce, and Labor
76
Certain petroleum enterprises have requested clarifications regarding
the order issued by this Department dated June 8 and amended August
24, last, for the perforation of wells on lands to which the rights
of the enterprises or private individuals might not have been duly
justified.
The purpose of the Department in issuing this authorization was none
other than to accede to a written petition of serious companies who
offered to give the guarantees the Government demanded to its
satisfaction in order to obtain permits with the purpose of not
interrupting exploitation to the prejudice of the industry and of
the enterprises and private individuals who, on account of their
engagements might suffer some injury as the result of the
paralyzation of their work.
[Page 687]
As is seen, this Department granted the authorization guided by a
broad spirit of cooperation and interpreting the law in its
most-liberal sense, in view of its constant desire to grant to the
industry all facilities compatible with the legal precepts.
As the first order of June 8 established unlimited bond to guarantee
the drillings and the exploitations which might be made by virtue of
this order and certain enterprises stated that they were unable to
give this kind of guarantee, and since every order must be of
general application, a new attempt was made to give greater
facilities and the amended order of August 24 modified the unlimited
guarantee by a fixed guarantee of 100,000 pesos for the bond, which
for this purpose was to be given according to the provisions of the
first order cited.
If, then, drilling permits are only to be granted to those who
justify their rights in the lands they desire to drill, the
Department, in giving this greater degree of facility, had to try to
see that such liberality was guaranteed.
The bond established has two purposes:
- I.
- To guarantee the amount of any royalty that might belong
to the nation in case the land be national property;
- II.
- To back up morally the authorization granted.
And if the enterprise benefited by the permits can not prove its
rights by any of the means which our laws concede to it, it is
logical that the nation should have the power to require the legal
participation belonging to it in case the lands are national
property and, in case they be not so, that the rights of third
parties be protected; but if the beneficiaries should not pay the
share which legally belongs to the Federal Government, the
Department would be legally capacitated to make the bond effective
without this implying that the interested parties were deprived of
the judicial remedies the law grants in these cases if they think
that this measure is violative of their rights.
If after the granting of the provisional permit the beneficiary
should not prove his acquired rights in the land and petitions for
his concession, the latter will be granted preferentially always
saving the rights of third parties.
As for the granting of the bond, it is believed that it should be
made before drilling is commenced, although it is not the purpose of
the Department to cause unnecessary expenses, since if the drilling
carried out were not productive this same bond can be used for a new
drilling to be granted under similar conditions or will be cancelled
if the said bond is not used for this purpose.
