Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1927-10-19
TEXAS DAILY PRESS LEAGUE


A majority OF the big oil companies operating in
Mexico are reducing their staffs and curbing opera
lions, according to information received in New York.
headquarters Of practically all the American oil inter-
ests. The Standard Oil Company of New York and the
Pan-Ameriean Petroleum and Transport Company, both
OF which are heavy operators in the Tampico section,
are reported to have withdrawn part Of their equipment
to Venezuela, where they have heavy interests. Tam
pico rumors are TO the effect they will practically with
draw from the operating field in Mexico.
The reason given for their action was their in
ability to secure drilling permits, overproduction in
the United States and the increased production in
Venezuela. They assert that in view of impending mar
kt conditions, the necessity for restriction Of produc-
tion in the United States, they cannot afford to operate
such holdings as they have drilling permits for in the
Mexican fields.
Much litigation will be necessary before a eompre-
hensive understanding will be reached over the oil law.
This is indicated by the recent establishment Of larger
offices by the Association OF Petroleum Producers in
Mexico, a group composed of American and European
companies which are united in their stand against the
new law. Many Of the most eminent international
lawyers are reported to have been retained by these
companies, and they have indicated that they will wage
a campaign TO secure legal concessions which will make
the law less drastic in its terms.
Many applications for writs and injunctions, filed
In the supreme court and lower tribunals against the
application Of the oil law are awaiting final rulings.
Fifteen such cases are awaiting hearing before the
supreme court, with none Of them yet placed upon the
calendar.
In this connection it has been pointed out that
these are among the chief problems Of the United
States which Ambassador Dwight W. Morrow will be
expected to investigate upon his arrival in Mexico
City. The problem is a very serious one, and the new
ambassador will probably be given Immediate oppor-
tunity to display his ability.
Fortunately for the United States the gradual clos
ing down Of the Mexican oil fields in which American
and European capital is interested will not seriously
affect the oil situation. American wells are now over
producing, and the elimination Of this competition will
be welcomed by many Of the domestic producers. The
Venezuelan government is extending full cooperation
in the opening Of new fields, in holding out induce
ments TO foreign capital and otherwise aiding in the
development Of an immense industry which is adding
materially TO the revenues and prosperity Of that ma
ton. And the ever increasing supply from those fields
is meeting the mounting demand Of Europe.
However. the fact that the oil situation will not
be materially affected by Mexicos oil laws does not re-
imburse the American and European investors who
have invested their capital in the Mexican fields. They
take the attitude that their confidence has been
abused; that the Mexican oil laws are virtually con-
fiscatory, and that they are entitled 70 some redress.
The ambassador who can solve the problem viii be full
ly entitled to his salary.