812.6363/8005

The Chargé in Mexico ( Bursley ) to the Adviser on Political Relations ( Duggan )

Dear Larry: I refer to my letter to you dated February 1591 concerning a ruling of the Minister of National Economy prohibiting the drilling of oil wells under the direction and supervision of foreign technicians.

I asked Tom Lockett92 to follow up on this matter and have now received from him a memorandum dated May 21 which reads in full text:

“Hereto is Attached your letter to Mr. Duggan of February 15, in relation to a prohibition of drilling oil wells under the direction and supervision of foreign technicians. I discussed this matter with Minister Gaxiola on May 19 and he said that the article in question was somewhat misleading. He stated that any petroleum company operating legally in Mexico could employ foreign drillers and technicians, provided, it was definitely established to the satisfaction of the Government that such employment was not being used as a means of permitting foreigners to undertake petroleum exploration for their own account. In other words, it must be shown to the Mexican Government that the foreign technicians and drillers are employed exclusively [Page 463] for the use and benefit of an oil company operating legally in Mexico and that the foreign drillers and technicians are not being used as a ruse to gain the entrance of foreigners into the oil exploration business for their own account. I hope that I have explained this clearly, but, in ordinary language it means that the Mexican Government fears that legally operated foreign oil interests in Mexico might try to secure the entrance of other foreign interests through the pretext of employing drillers and technicians for the account of the legal company, whereas it would be for other purposes. (s) THL.”

I am sending an extra copy of this letter to Mr. McGurk93 to whom I had sent a copy of my letter of February 15.

Sincerely yours,

Herbert S. Bursley
  1. Not printed.
  2. Counselor of Embassy for Economic Affairs.
  3. Joseph F. McGurk, Assistant Chief of the Division of the American Republics.