Evening star., 1928-03-28
OIL OUTPUT
IN
Production in Various Areas
Still Is ExtenSiVe-ConSer-
vation Urged.

Snecial Dispateh TO The Star.

Special Dispatch TO The Star.
NEW YORK. March 28,-No inn
mediate increase in the production of
oil in Mexico is anticipated by oil men
here as a result Of the new regulations
promulgated by President Gales for the
governing of the petroleum land situa-
ton in accord with the decree OF the
Mexican Supreme Court of November
II, 1927.
Production of oil in the United States,
Mexico and South America still is ex
tensive. Refinery activities have in
creased but the supplies are still In ex-
cess of demand. The improvement is
gradual and considerable time is ex-
pected to elapse before the situation will
call for additional shipments from the
Mexican fields.
The move of President Gales may
have the effect of clearing title to oil
lands acquired prior to May /, 1917,
when the present constitution Of Mex
leo went into effect, but Is hardly likely
TO encourage immediate resumption Of
drilling or refining in that country.
Over-enthusiastic development of new
fields in recent years is directly re-
sponsible for the depression now exist
ing in the petroleum industry, and the
oil companies are not likely to repeat
the mistake when they have large sup
plies in storage or shut-in production
in Mexico and elsewhere.
Conservation Now Policy.
Moreover, it is pointed out that the
stipulations of the 1917 constitution cam
not be changed except by the Mexican
congress, while the regulations pro-
mulgated by President Gales can be
changed by the executive. Failure of
the oil companies to increase activities
doubtless would be extremely disappoint-
ing to Mexico, since the oil production
and export taxes have been the most
prolific sources Of revenue for the Gov
ernment. Many oil men believe the fall
ing off in shipments from Mexico to
the United States had as much infiu-
ence as the activities Of Ambassador
Morrow in producing the new accord on
the oil situation
The petroleum industry in this coun-
try has just about concluded that a
permanent policy of conservation, in
ternational as well as national must
supplant the temporary expedient of
curtailing production before there can
be anything like a satisfactory return to
normal conditions.
A big step forward to this end was
TAKEN Wnen the Oklahoma- kansas di-
vision Of the d-Continent Oil and
Gas Association met to discuss the
movement extending to foreign fields.
Heretofore the association has been con-
tent to remain in the background.
although tacitiy tndorsing the curtail-
ment Of production and restriction Of
drilling.
Venezuelan Curtailment.
West Texas Is called by some a
thorn In the side of the industry, since
in that field 1t is alleged heavy pro-
duction has far outrun demand. An
encouraging sign is seen In the move
TO curtail production in Venezuela,
which has been in direct competition
with west Texas and Mexico because
the water freight rate TO Atlantic ports
is cheaper than the rail rate from
Texas fields.
Steps are also being considered to
hold down the rapidly increasing output
Of the Hendricks field. Unless these
steps are successful some oil authorities
say that west Texas crude may fall
to half its present price. which would
have depressing effect on crude and
refind prices the country over.
No mention was made in An1bassad dor
Morrow's report as TO whether the regu-
lations signed by President Gales ap-
ply equally 70 mining lands 1t is in