812.6363/707
The Association of Producers of Petroleum in Mexico to the Secretary of State
[Received August 7.]
Sir: The publication on July 10th, 1920, in the Diario Oflcial of Mexico City, of “Circular No. 10, prescribing the conditions under which concessions for the development of petroleum and other hydrocarbons will be granted”44 makes it necessary for the Association of Producers of Petroleum in Mexico to call to your attention a grave infraction by the Mexican Government of American rights in oil lands in that country.
By the law of Mexico as in the United States, the owner of lands adjoining or surrounding streams owns to the center of the stream. This ownership has always been subject to an easement enjoyed by the public on the edge of the stream known as “Camino de Sirga” or, literally, tow-path. By Mexican law of 1902, entitled “Law regulating National Lands and lands of public use”, this tow-path or public easement was defined as being twenty meters in width alongside streams to the high tide mark and from high tide mark as far as the rivers may be navigated by rafts, ten meters in width. This public easement was given the name of the “Federal Zone”.
This law did not change property rights—the land owner was and is proprietor of land to the center of the stream but subject to an easement of public use.
[Page 218]In 1906 concessions were granted in five states to Pearson & Son, Limited, giving that corporation the right to drill on all public and Federal lands in these states. This concession was passed to the Aguila Company. It was recognized that the Federal Zones were not the property of the Government but of the private owners of adjoining lands, for they were not included in the Federal lands granted by said concessions, which were all subsequently approved by the Mexican Federal Congress.
During the incumbency of President Madero, a concession was granted to two Mexican Government favorites, giving them the right to drill on Federal Zones. The concession was transferred to the Compañia Maritima de Petroleo. Certain American stockholders have drawn out of the Company convinced that the concession is valueless because the lands it covers are not the property of the Nation and that its operations infringe the property rights of American oil companies whose lands adjoin rivers.
American companies in Mexico, members of this Association, have acquired by purchase and lease under Mexican laws, lands for the purpose of oil drilling adjacent to navigable streams. Their legal rights entitle them to drill in the lands or in the Federal Zones if the public right of way is not disturbed by drilling operations. By reason of the Carranza decree of March 12th, 1920,45 and the decree of July 10th, herein referred to and translation of which is hereto annexed,46 they find themselves despoiled of their drilling rights and subject to the extraction of oil from the deposits to which they are legally entitled by third parties operating in the Federal Zones under concessions provided for in said decrees. Nearly all oil properties in Mexico are crossed by streams or creek beds which, at certain times of the year, carry water and may be claimed to be navigable by rafts for a few months in the year.
Concessions have been issued to third parties to drill in such locations. A continuation of this practice exposes all American companies to invasion of their legally acquired lands and to diminution of their oil production by concessions under the decree in question.
The American members of the Association of Producers of Petroleum in Mexico respectfully call your attention to this additional attempt at confiscation of their legally acquired properties in Mexico and ask that steps, consistent with the policy of the American Government toward the present unrecognized government of Mexico, [Page 219] be taken to end the invasion of their property rights and the confiscation of their properties by the decrees of March 12th and July 10th, 1920.
We have [etc.]
By
Chairman of Executive Committee