Papers Relating to the Foreign Relations of the United States, 1918

File No. 812.512/2238

The Ambassador in Mexico ( Fletcher) to the Secretary of State

No. 1639

Mexico, December 3, 1918.

Sir: With reference to the Embassy’s despatch No. 1627 of November 27, 1918,¹ I have the honor to transmit herewith the translation of the new proposed petroleum law, submitted to the Congress by President Carranza on November 23, 1918.

I have [etc.]

Henry P. Fletcher

[Enclosure—Translation]

Proposed petroleum law transmitted to the Congress of Mexico by the President of the Republic, on November 23, 1918

The Executive of the Union, in the use of the power granted him by Clause I of Article 71 of the Federal Constitution in force, and considering:

That Article 27 of the Constitution sanctions the principle of direct domain of the nation over the carbides of hydrogen;

That the effective application of this constitutional principle renders necessary the enactment of an organic law defining rights and establishing legal procedures, in accordance with the legitimate interests of the petroleum industry;

That the increasing importance of this industry demands that preference be given to the solution of all problems connected therewith, in order that exploitation operations may be fomented by the investment of new capital; and,

That since this situation can only be created by the establishment of a legal system which will consolidate past investments and facilitate future ones;

Submits to the consideration of the honorable Congress, the following

PROPOSED ORGANIC LAW, BASED ON ARTICLE 27 OF THE CONSTITUTION, COVERING THE SUBJECT OF PETROLEUM

Chapter I.—The Petroleum Claim and its Accessories

• Article 1. The following pertain to the direct domain of the nation and are subject to the provisions of this law:

  I. The pools, reservoirs and natural deposits of petroleum;

  II. Gaseous hydrocarbides encountered in the subsoil or surface seepages;

  III. Natural deposits of ozokerites and asphaltum;

  IV. Any mixture of hydrocarbides of the different groups due to the action of natural agencies.

• Art. 2. The direct domain of the nation over the substances enumerated In the preceding article is inalienable and imprescriptible; consequently, the rights which are granted under this law will not constitute absolute and conclusive possession.
• Art. 3. The rights granted under this law may be hypothecated, transferred and transmitted through heritage, in the same cases as are authorized by the common laws for real properties, but the Department of Industry, Commerce and Labor must be notified of all such transactions effected. Failure to comply with this provision shall be punished by a fine of from 50 to 500 pesos, and no class of works connected with the petroleum industry will be permitted to be executed on the petroleum claims affected until the fine imposed has been paid.
• Art. 4. The petroleum industry is declared to be a public utility; therefore, surface ground necessary for the exploitation of the claims may be condemned in accordance with the provisions of law.
• Art. 5. Each petroleum claim shall be the object of a concession.
• Art. 6. A petroleum claim is considered to be a plot of ground of indefinite depth, bounded underground by the vertical planes corresponding to the surface boundaries of a continuous area of land, and destined to the exploitation of petroleum.
• Art. 7. The exploitation of petroleum covers the extraction, recovery or utilization of the substances specified in Article 1.
• Art. 8. The surface area of a claim shall not be less than four hectares, and its shape shall be such as to admit of the location of a well and tank, in accordance with the regulations in force on the date of the concession.
• Art. 9. The sole purpose for which concessions are granted under this law by the Federal Government to individuals or to civil or commercial corporations incorporated in conformity with the Mexican laws, shall be the exploitation of the substances enumerated in Article 1.
• Art. 10. The concessionaire of a petroleum claim may extract therefrom and utilize all the substances referred to in Article 1, without other restrictions than that of not invading adjoining claims with his extraction operations, and that of complying with the provisions of this law and the regulations which may be issued covering the exploitation of petroleum.
• Art. 11. The exploiters of a petroleum claim may occupy, within the limits of the claim and upon the judicious authorization of the Executive, the surface area necessary to the extraction operations and the immediate storage of the products extracted, paying the corresponding indemnity to whomsoever may be entitled thereto, but the consequent legal proceedings shall not delay the execution of the works.
• Art. 12. The exploiters of a petroleum claim shall acquire the right of transit and pipe-line right of way, through the judicious authorization of the Executive, and to install the pipe lines and pumping stations necessary to the exploitation of the claim, paying the corresponding indemnities to whomsoever may be entitled thereto, but the consequent legal proceedings shall not delay the execution of the works.
• Art. 13. The exploiters of petroleum claims shall have the right to construct storage plants and refineries, upon the approval of the respective plan by the Executive, and the consent of the owners of the lands intended to be occupied. In case such consent cannot be obtained, the necessary surface area shall be condemned in conformity with the laws in force covering condemnation proceedings.
• Art. 14. The exploiters of petroleum claims shall have the right to build wharves, loading stations, and lay submarine pipe lines, upon the approval of the Executive and in conformity with the dispositions in force covering such matters.
• Art. 15. Only the respective concessionaires of petroleum claims shall have the right to construct storage stations or refineries thereon.
• Art. 16. The concessionaire of a claim may utilize the surface waters necessary to his exploitation operations in accordance with the common laws governing the same. He may likewise use underground waters for the same purpose, upon authorization of the Executive and by paying the corresponding indemnity to whomsoever may be entitled thereto.

Chapter II.—How the Concession Covering a Petroleum Claim May Be Acquired, and How It May Be Forfeited

• Art. 17. The right to exploit a petroleum claim shall be acquired originally from the nation, through the title issued by the Executive, after the requisites established by this law have been complied with.
• Art. 18. For the effects of this law, the lands of the Republic shall be considered as divided into the following classes:

  I. Lands owned by individuals;

  II. Pro indiviso lands;

  III. Lands owned by the nation, for public use;

  IV. Community lands;

  V. Commons; and

  VI. All lands owned by the nation, states and municipalities, not included under the preceding classes.

• Art. 19. On lands owned by individuals the right to exploit a petroleum claim shall be conceded, after denouncement, upon the payment of the taxes and compliance with the other requisites of this law and its regulations.
• Art. 20. Upon pro indiviso lands which have not been legally contracted for the exploitation of petroleum, only the coowners thereof may denounce petroleum claims. Denouncement proceedings shall be suspended until a majority of the coowners, representing the greater part of the surface area of the community land, have appeared before the Secretary of Industry, Commerce and Labor, who shall issue due notice to all the coowners to so appear, to render, express and prove declarations of their individual rights, and, all being agreed, a common title shall be extended to them covering the petroleum claim in the subsoil of the pro indiviso land. In these titles the representation of each coowner shall be stated. The citation by which the coowners are convoked shall be exhibited on the bulletin board of the respective petroleum agency during a period of sixty days, and shall be published three times, during the same period, in the Official Daily of the Federation and of the state to which the land belongs, and furthermore in one of the periodicals of greatest circulation in the community, selected by the chief of the agency.
• Art. 21. A period of ninety days having transpired, counting from the date of the citation mentioned in the preceding article, without all the coowners of the pro indiviso land in question having appeared either in person or through legally authorized representatives, those who have not appeared shall be considered as having lost their rights, and a title to the corresponding claim shall be issued, after compliance with the mandates of this law, to those coowners who have appeared. When those who appear do not solicit title to a petroleum claim covering all the land involved, a title shall be issued to them covering the part which they solicit, and the remaining land shall be declared free ground.
• Art. 22. In the case of community lands, concession to explore for or exploit petroleum shall not be granted, unless the concessionaire removes the community to a spot selected by the Executive, and indemnifies the members of the community for all the damages caused by such transfer.
• Art. 23. In the case of commons, titles covering petroleum exploitation shall only be issued after the lands have been divided and the fractions adjudicated, under the same terms as apply in the case of privately owned land.
• Art. 24. There shall be considered as national preserves, the lands comprised in Clauses III and VI of Article 18, national lands granted with reservation of subsoil rights, and all those which, as established hereinafter, shall be withdrawn from petroleum exploitation.
• Art. 25. The national preserves shall be granted for exploitation through special contracts made by the Executive in accordance with the following bases:

  (a) In every case compliance with the requisites of this law and its regulations shall be demanded;

  (b) According to the location and importance of the claim solicited, the Government will demand a share of the production obtained, variable between 10 and 20 per cent thereof;

  (c) Corporations that solicit claims on national preserves must have the fully paid capital that in the judgment of the Executive is necessary, and of which they shall exhibit 20 per cent before obtaining the concession:

  (d) These contracts shall be made without prejudice to third parties who hold a better right, and also without prejudice to navigation, agriculture, fisheries, common transit and other services or uses to which the lands involved may be destined by law or usage; and,

  (e) The concession contracts covering national preserves shall be subject to the approval of Congress.

• Art. 26. Only denouncements of petroleum claims on free ground shall be accepted; the following not being considered as such: Land covered by a petroleum claim title in force, and that which has been denounced and the denouncement of which is still pending decision.
• Art. 27. Nor shall the following land be considered as free ground, until a period of thirty days has elapsed counted from the date on which the relative declaration was first exhibited on the bulletin board of the respective petroleum agency:

  I. That covered by claims the titles to which have been declared canceled; and,

  II. That corresponding to claims the denouncements on which have been definitely rejected.

• Art. 28. Each denouncement shall cover only a single petroleum claim.
• Art. 29. The denouncer of a petroleum claim shall file in triplicate, with the corresponding agency of the Petroleum Bureau of the Department of Industry, Commerce and Labor, a denouncement in which his name, age, profession, domicile and nationality are stated, as likewise the location, area boundaries and all other distinguishing features which will serve to identify the claim solicited.
• Art. 30. If the denouncer is a foreigner he shall include with his petition a statement from the Department of Foreign Affairs, certifying to his having complied with the requisites of Article 27 of the Federal Constitution.¹
• Art. 31. The denouncer shall present together with his denouncement, a statement from the stamp tax administration certifying that he has deposited therein the value of the revenue stamps which must be affixed to his title, according to the area of the claim solicited.
• Art. 32. The agent of the Petroleum Bureau shall receive the denouncement, entering the same in his register and noting therein and on the original and copies of the denouncement, the date and hour of filing. The denouncer may demand that these notations be made in his presence. If in the judgment of the agent the denouncement is not sufficiently clear, he shall request the person filing the same to make the necessary explanations, and shall enter same in his register book and on the original and copies of the denouncement. The lack of explanatory data shall not constitute cause for refusing to register the denouncement. The duplicate copy of the denouncement, with the respective notations thereon, shall be returned to the person filing the same.
• Art. 33. Within three days following the filing of a denouncement, and in view of the explanations rendered, the agent shall decide whether or not it shall be accepted. If accepted, he shall proceed to dispatch the relative documents; if rejected, he shall state in writing the reason for his adverse decision, which shall be subject to revision by the Department of Industry, Commerce and Labor on petition of the denouncer, filed with the said agent upon being notified that his denouncement has been rejected, or within the three following days.
• Art. 34. When two or more denouncements, filed simultaneously and referring to the same land have been declared admissible, process shall be given to the one designated by the laws of chance, unless the interested parties reach an agreement as to which shall be given preference.
• Art. 35. When several denouncements are presented simultaneously, covering different claims but all of which contain a common part, a drawing shall be held, taking part therein all the denouncements filed. If the denouncement favored by chance includes all the other denouncements, by that simple fact all the other denouncements which have participated in the drawing shall be rejected; but if the winning denouncement includes only a part of the land denounced, the remainder shall be submitted to a new drawing anions all the denouncers, with the exception of the winner of the first drawing; if, after the second drawing, there still remains uncovered a part of the land involved, further drawings shall be held in the same manner as long as may be necessary. The drawings shall be held at intervals of three working days, in order that the denouncers may be able to be present at each drawing with their denouncements in due form. The interested parties who do not assist at the drawings to which they have been convoked, shall be considered as having desisted from their denouncements and shall lose their rights, the drawings being held only from among the denouncements of those present. All the drawings shall be subject to the provisions of the regulations which are issued to cover.
• Art. 36. As soon as an agent accepts a denouncement, he shall exhibit the same on his bulletin board during one month, and shall order it to be inserted three times during the same period of time and for the account of the interested party, in the Official Daily of the Federation and of the State to whose jurisdiction the claim denounced corresponds, and, furthermore, in another periodical selected by the agent from among those of greatest circulation in the locality. The interested party has the right to arrange personally for these insertions.
• Art. 37. The following are causes for opposition which will suspend the course of the denouncement:

  I. The total or partial invasion of a titled petroleum claim, the title to which has not been declared canceled;

  II. A prior denouncement legally filed, covering a part or all of the same claim denounced, and which is pending decision; and,

  III. Not having terminated when the denouncement is filed, the period during which this law grants preference to some individual or company, covering the claim involved or some part thereof.

• Art. 38. An opposition based on any of the causes indicated in the preceding article shall be entered before the corresponding petroleum agency during a period of sixty days counting from the date on which the denouncement is first exhibited on the bulletin board of the agency.
• Art. 39. The opposition having been entered, a meeting shall be called for the purpose of securing an adjustment among the interested parties, observing the method of procedure indicated in the regulations of this law. In the event no adjustment is reached, the interested parties shall be notified in the act that they may select either administrative or judicial channels to adjust the opposition.
• Art. 40. Should the interested parties not select immediately the administrative channels, the proceedings of the denouncement shall be suspended and the same shall be remitted within forty-eight hours to the judicial authorities, in order that the corresponding suit may be substantiated in accordance with the provisions of the respective articles of this law.
• Art. 41. In case the interested parties choose the administrative channels, the denouncement shall proceed in order that at the opportune time the Federal Executive, hearing both the denouncer and the opposer entering the opposition, in accordance with the provisions of the regulations of this law, may render a final decision on the opposition.
• Art. 42. If the interested parties have chosen administrative channels, they may not later have recourse to judicial channels; but if they have chosen the latter they may, so long as an executory decision has not been rendered, submit the opposition to the decision of the Executive.
• Art. 43. Any cause of opposition differing from those indicated in Article 37 should be entered before the agency, but the latter shall not then suspend the proceedings of the denouncement. When the denouncement papers are passed to the Executive for revision he shall decide whether or not the said cause should be given consideration. If accepted for consideration, the opposition shall be duly substantiated and decided, observing in the consequent proceedings the method indicated in Articles 39 to 42. Should the Executive not consider the said opposition, he shall proceed as though it had not been entered, the opposer reserving his due rights.
• Art. 44. During the revision of the denouncement papers oppositions entered in accordance with the legal requirements may be taken into consideration, always provided that the opposers furnish proof of not having had recourse to the petroleum agency for causes beyond their control.
• Art. 45. The opposer who does not appear at the adjustment meetings shall be considered as having desisted from his opposition, except in case of causes beyond his control.
• Art. 46. The denouncer of a claim who fails to pay for the insertions mentioned in Article 36 shall be declared in default; as likewise he who does not furnish the explanatory data requested in order to proceed with the denouncement, within the period of time fixed therefor; and he who fails to appear at the adjustment meetings when opposition is entered to the said denouncement. The defaulting denouncer shall forfeit the deposit referred to in Article 31.
• Art. 47. The Executive may absolve the defaults of the defaulting denouncer, if the latter furnishes proof during the progress of the denouncement or during the revision of the documents thereon, that his defaults have been due to causes beyond his control.
• Art. 48. A period of sixty days having transpired without any opposition having been entered which would cause the suspension of the administrative proceedings, the petroleum agent shall remit to the Department of Industry, Commerce and Labor, a copy of the denouncement tile in its present status.
• Art. 49. Titles to petroleum claims shall be issued by the Executive after the termination of the proceedings. These titles confer legal possession to the respective claims without the necessity of any other formality.
• Art. 50. Titles shall be issued in favor of the denouncers, without prejudice to third parties. In order that a title may be issued to a person other than the denouncer, the transfer of the rights of the latter in favor of the former must be confirmed by a public instrument. The interested party shall furnish proof of having paid the rental corresponding to his claim, before receiving the title.
• Art. 51. The Department of Industry, Commerce and Labor may demand that the interested party correct whatever imperfections there may be in the denouncement or in the documents thereof, providing such imperfections do not involve an infraction of this law or of the regulations. The denouncer who, in that case, does not comply with this requisite, shall be declared desisted from his denouncement, and the penalty established in Article 46 of this law shall be imposed.
• Art. 52. In the cases of infraction of the law or of the regulations, or of imperfections in the denouncement documents, imputable to the agent, the Executive shall enforce the responsibility of the latter, without prejudice to the rights of the denouncer to demand indemnity from the agent for the damages and injuries sustained.
• Art. 53. The concessionaire of a petroleum claim may at any time request a reduction in size of the same. The respective petition shall be presented to the corresponding petroleum agency, together with a plan of the reduced claim and the original title.
• The new title will cancel the previous one, the stamp title tax not being levied. The concessionaire shall be obligated to erect new monuments on the reduced claim within the period of one year counting from the date the new title is issued. As soon as the reduction has been approved, the excess land shall be declared free ground.
• Art. 54. The concessionaire of a claim may request that the same be enlarged by the addition of an adjoining lot, the area of which is less than four hectares. The petition must be accompanied by a plan showing the horizontal projection of the original claim and of the additional fraction, as also the certificate substantiating the deposit of the value of the revenue stamps corresponding to the title tax on the said fraction. The petition shall be treated as a denouncement and a new title shall be issued to the enlarged claim, affixing thereto the revenue stamps corresponding to the additional fraction, and noting thereon that the original claim had already been titled.
• Art. 55. When the surface area of the fraction that it is desired to acid to a claim is greater than four hectares, a petition for enlargement will not be accepted, but must be treated as a separate denouncement.
• Art. 56. The concessionaire of a petroleum claim shall pay the rentals and royalties stipulated in the decree of July 31 of this year, the same being effective from the date of the title.
• Art. 57. Within the period of one year from the date of issuance of the title covering a petroleum claim, the interested party is obligated to erect monuments at the corners and other conspicuous boundary points, and such intermediate monuments as may be necessary so that each is visible from the preceding one, and to present in duplicate to the Department of Industry, Commerce and Labor a plan of the land so monumented. This plan shall fulfil the requisites fixed by the regulations covering exploitation, and in accordance Therewith the ratification or rectification of the boundaries shall proceed.
• Should the concessionaire fail to comply with this obligation, the Executive will levy a fine of five hundred pesos, and will fix a new period of one year during which to comply with the said obligation; should he not comply during this new period, a fine of one thousand pesos will be imposed, and thus successively, a fine of one thousand pesos will be collected for each year that transpires, the Executive reserving the right, if he judges the same convenient, to order the plan made and the claim monumented for the account of the concessionaire.
• Art. 58. During the period of one year following the presentation of the plan of the monumented claim, the concessionaire must present in duplicate to the Department of Industry, Commerce and Labor, plans and descriptive memorials of the works and installations projected for the exploitation of the petroleum claim. The said plans and memorials shall fulfil the requisites of the regulations covering exploitation.
• If the concessionaire does not present the documents mentioned in this article, the Executive will impose a fine of two hundred pesos, and will fix a new period of one year during which to present them, repeating the fine as many times as may be necessary until compliance. The concessionaire of the claim may not commence exploitation operations without having previously complied with the obligation imposed by this article.
• Art. 59. During the period of one year from the date of presentation of the plans and memorials to which Article 58 refers, the concessionaire of a petroleum claim is obligated to furnish proof to the Department of Industry, Commerce and Labor that he has commenced exploitation operations on his claim. Once such operations have been commenced he shall report each semester regarding the progress made, no interruption of operations for a period exceeding six months being permitted.
• Art. 60. The ratification or rectification treated of in Article 57 may be made on petition of the owner of the claim in question, or of owners of adjoining claims, or ex officio by ruling of the Executive. In the latter case the final decision of the Executive shall not prejudice the rights of the owner of the rectified petroleum claim and of the owners of adjoining claims who consider themselves injured thereby.
• Art. 61. The Department of Industry, Commerce and Labor, on petition of the owner of a petroleum claim, may order corrected administratively, and without prejudice to third parties, any errors that may appear in the title, providing such correction does not affect the location of the claim. In the latter case a new title shall be issued, on which the title tax will not be levied, and which will cancel the previous title.
• Art. 62. All rectifications shall be based upon the data which has been furnished in the denouncements.
• Art. 63. A petroleum claim may be subdivided into fractions that fulfil the requirements of this law; but in order that the subdivision may have the desired legal effect, the fractions shall be monumented and titled, the original title being canceled. The petition for subdivision shall be presented to the agency having jurisdiction over the claim involved, being accompanied by a plan of the subdivision.
• Art. 64. All concessionaires of petroleum claims are obligated to furnish to the Department of Industry, Commerce and Labor, the technical and economical data requested thereby through the petroleum bureau, and to give access to their works to the students of the official schools making a practical study of the petroleum industry, providing them with every facility. These obligations extend to concessionaires of pipe lines, refineries, storage plants and loading stations.
• Art. 65. The discoverer of a petroleum deposit outside of the States of Chiapas, San Luis Potosí, Tabasco, Tamaulipas and Vera Cruz shall pay 10 per cent of the taxes imposed on ordinary claims, and may denounce claims up to one hundred hectares to protect the deposit discovered.
• Art. 66. Petroleum claim titles may be canceled for the following reasons; failure to pay any of the taxes referred to in Article 56; failure to comply with any of the conditions imposed in Articles 59 and 64; or any serious infraction of the regulations covering exploitation in the terms stipulated therein.
• Art. 67. Forfeiture of titles shall be declared administratively by the Executive, through the Department of Industry, Commerce and Labor, after the interested party has been cited to appear in his own defense, providing he does not furnish satisfactory proof to the said Department that his failure has beep due to causes beyond his control.
• Art. 68. In cases of forfeiture for non-payment of rent, the corresponding declaration shall be made within four months following the bimonthly term in which the failure in payment occurred.
• In cases of forfeiture clue to non-payment of royalties, the declaration of forfeiture shall be made during the bimonthly term following that in which the penalty was incurred.
• Art. 69. The direct and officially recognized exploiter of a claim the title to which has been declared canceled, he not being the concessionaire, shall enjoy the right of preferential denouncement during the thirty days subsequent to the date on which the declaration of cancelation is first exhibited on the bulletin board of the respective agency.
• Art. 70. In case the exploiter of the claim does not exercise the right of preference granted in the preceding article, the Executive shall, without prejudice to the interest of third parties, take possession of the claim, machinery and other installations used in the exploitation operations, selling the concession to the claim at public auction. Reference shall be made to this article in all petroleum claim concessions.

Chapter III.—Transportation, Storage and Refining

• Art. 71. The Executive shall grant concessions to individuals or to civil or commercial corporations organized in accordance with the Mexican laws, covering the establishment and operation of pipe lines, storage stations for petroleum, gas and the by-products thereof, and refineries. The form and manner of dispatching petitions for such concessions, shall be determined by the regulations.
• Art. 72. The concessionaire of the installations referred to in Article 71 shall be entitled to right of passage, pipe line right of way and the right of expropriation.

Chapter IV—Right of Way and Expropriation

• Art. 73. The rights of way authorized by this law shall be governed by the precepts of the civil code of the Federal District, as regards the rights and obligations of the expropriating and expropriated parties, without prejudice to the provisions of the following article.
• Art. 74. Pipe line right of way implies the right to occupy the surface ground necessary, in the judgment of the Executive, for the laying of the pipes to carry the petroleum, natural gas and by-products thereof; for the installation of the pumping stations and oil reservoirs necessary to the operation of the pipe line; for the construction of service railways, and telegraph, telephone and power lines to be used in the development of the petroleum industry; in general, for all works the object of which is the exploitation of a petroleum claim. This right of way shall extend over a zone 10 meters in width, unless otherwise agreed.
• Art. 75. The rights of way established by this law shall be created:

  I. By consent of the owner of the expropriated ground, registered in a public instrument;

  II. By decision of the Executive; and

  III. By a court verdict.

• Art. 76. In case the owner of the expropriated land fails to consent, the expropriator shall apply to the Executive who, having heard the former, shall decide whether or not the right of way should be granted. If granted, he shall fix the use and extension thereof, the material conditions of its creation, and the indemnity which should be paid to the owner of the expropriated land.
• Art. 77. The decision of the Executive authorizing the creation of the right of way shall be considered as final unless objection is made within thirty days.
• Art. 78. If during the period mentioned the owner of the expropriated land expresses his non-conformity, the Executive may authorize the execution of the works necessary for the performance of the servitude, after the owner of the petroleum claim has furnished a guaranty to cover the damages and injuries which may be occasioned.
• Art. 79. In urgent cases, such as those mentioned in Articles 11 and 12, the Executive may authorize indispensable works without the previous knowledge of the owner of the expropriated land, nor the deposit of the guaranty mentioned in the preceding article, but with the express condition that the interested party shall be notified immediately and that the deposit of the guaranty shall be made during the ten days subsequent to such authorization.
• Art. 80. The owner of the service land shall be notified of the decision mentioned in Articles 78 and 79, and shall enter an action through judicial channels within the period of thirty days; but should he not do so, the servitude will be considered as definitely constituted, and the guaranty shall be ordered withdrawn.
• Art. 81. Should the Executive decide that the servitude should not be constituted, or that it should be constituted under terms different from those requested, the interested party may demand the same through the courts, during the period of thirty days, after which time he shall lose that right.
• Art. 82. In authorizing or refusing the constitution of servitudes, the Executive shall be governed by the provisions of the civil code of the Federal District as regards matters not expressly stipulated in this law or in the regulations thereof.
• Art. 83. The extension of servitudes already constituted shall be subject to the rules prescribed for their creation.
• Art. 84. When condemnation proceedings conform to the provisions of this law, and an agreement cannot be reached with the owner of the surface land, the petitioner may apply to the Executive, who having heard the former, shall render decision after receiving the testimony of the experts and the required data.
• Art. 85. If the owner of the land resists occupation the owner of the petroleum claim may apply to the Executive, to the end that he be given immediate possession of the land covered by the decision.
• Art. 86. The owner of the condemned land, or his successor or assigns, shall have the right, during the period of one year, of redeeming the condemned land:

  I. When the condemnation was authorized because of a specified work, and the same has not been commenced during the aforesaid period;

  II. When the condemned land is used for purposes other than those stipulated in the condemnation, such as for agricultural or industrial purposes; and

  III. When the petroleum concession upon which the condemnation was based expires.

• Art. 87. The regulations shall specify the form of procedure when the owner of the surface land is unknown or uncertain.

Chapter V.—Suits, Penalties and Various Dispositions

• Art. 88. The Federal courts have jurisdiction over suits based on the following matter:

  I. Oppositions to denouncements, or the issuance or rectification of titles to petroleum claims;

  II. Nullity of titles to petroleum claims;

  III. Condemnation for the purpose of petroleum exploitation;

  IV. Right of passage, pipe line right of way and other servitudes;

  V. Crimes committed by infraction of this law; and

  VI. Crimes endangering the lives of workmen engaged in the petroleum exploitation, and inhabitants of the environs.

• Art. 89. In cases covered by Clauses I, II and IV of the preceding article, the jurisdiction shall be determined by the location of the petroleum claim involved.
• Art. 90. In suits over condemnations, jurisdiction shall be determined by the location of the condemned land.
• Art. 91. In the cases mentioned in the two preceding articles if, because of its location, the claim pertains to more than one jurisdiction, the plaintiff may select whichever of the judges involved that he may desire.
• Art. 92. In suits over oppositions referred to in Clause I of Article 88, the opposer or whoever has requested the rectification shall always be the plaintiff. The period allowed for entering an action shall be thirty working days, counted from the date of the adjustment meeting referred to in Article 39.
• Art. 93. If the period mentioned in the preceding article expires without an action having been begun, the judge shall declare the opposition unjustified, returning the administrative documents to the corresponding party.
• Art. 94. The opposer may only base his objections on the reasons he has expressly alleged at the proper time and which are stated in the administrative documents as remitted to the judicial authorities.
• Art. 95. In the case of opposition referred to in Article 37, the presumption shall be in favor of the denouncer who has entered the action.
• Art. 96. The opposition shall be substantiated in the form of a collateral issue in accordance with Article 556 and subsequent articles of the Federal code of civil procedure and the amendments and reforms thereof.
• Art. 97. In cases of condemnation the judges shall use the measures of judicial compulsion authorized by the Federal code of civil procedure, to establish the rights which according to this law correspond to the concessionaires of petroleum claims, pipe lines, storage stations and refineries.
• Art. 98 The crimes referred to in Clauses V and VI of Article 88 shall be punished in accordance with the Federal laws covering procedure in force.
• Art. 99. In all suits referred to in the articles which precede this chapter, the public prosecutor shall be heard, who shall see that procedures are not unduly delayed, to which end he shall procure that due process of law be given. In the said suits the public prosecutor shall take into consideration the recommendations made by the Department of Industry, Commerce and Labor.
• Art. 100. The periods of time indicated in this law and the regulations thereof, unless otherwise provided, shall begin on the day following the notification or the institution of the respective procedure, the day of expiration also counting.
• Sundays or national holidays shall not be counted.
• Art. 101. The provisions of the civil code of the Federal District covering common property are applicable to petroleum claims as regards all matters not covered by this law.
• Art. 102. The following shall be considered as commercial acts subject to the provisions of the commercial code as regards matters not expressly covered by this law:

  I. Oil companies;

  II. Contracts covering the transfer, hypothecation and exploitation of petroleum claims; and

  III. Contracts made regarding the production of petroleum claims.

• Art. 103. The value assigned to a petroleum claim in the act of incorporation of an oil company, shall be verified by expert appraisement, upon the responsibility of the expert appraiser.
• Art. 104. Suits arising from the contracts referred to in Article 102 shall be tried before the qualified judges of the common courts, in accordance with the provisions of the commercial code.
• Art. 105. The offices of commercial registry of the states, Federal District and territories shall maintain special register books in which the following shall be recorded:

  I. Titles covering petroleum concessions;

  II. Titles constituting servitudes;

  III. Public instruments covering agreements to transfer petroleum claims;

  IV. Public instruments and judicial or administrative sentences and decisions which confer or affect the rights of the concessionaires of petroleum claims, or by which property rights thereon are constituted or affected; and

  V. Public instruments and judicial or administrative sentences or decisions which affect the exploitation of petroleum claims, pipe lines, storage stations or refineries.

• Art. 106. The register mentioned in the preceding article shall be maintained in the office having jurisdiction over the petroleum claim. If the claim lies under various jurisdictions, the registry shall be maintained in all of the corresponding offices.
• Art. 107. Titles constituting servitudes shall be recorded in the registry offices having lawful jurisdiction over the service land.
• Art. 108. The record referred to in Clause III of Article 105 shall be effective as regards third parties, during the period of time fixed in the contract, but which period shall not be greater than six months counting from the date of recording, even though the period allowed for the fulfilment of the agreement be longer.
• Art. 109. When the document which is to be recorded is filed at an office within thirty days after the date of the instrument or of the respective decision or sentence, the registry shall take effect from the date of the document. If filed after the expiration of the said thirty days, the registry shall only take effect from the date of filing. The registry of public documents proceeding from foreign countries shall take effect from the date on which the certified copy of the protocolization is filed in the corresponding office.
• Art. 110. The Executive may impose, as a corrective measure, the fines permitted by Article 21 of the Federal Constitution for violations of the regulations of this law and shall consign those who should be punished for the commission of crimes to the proper judge.
• Art. 111. Any agent of the petroleum bureau guilty of malfeasance in the discharge of his duty shall be suspended and disqualified, in accordance with the penal code, and shall be punished by imprisonment of from six months to one year.
• Art. 112. If a denouncer or an opposer should be implicated in any case of malfeasance as mentioned in the preceding article, the penalties established therein shall be imposed on the agent, and the said denouncer or opposer shall be punished by a lesser fine and imprisonment. In cases of bribery the rule of accumulation of penalties shall be applied.
• Art. 113. Those guilty of illegally exploiting any of the substances mentioned in Article 1 of this law shall suffer the following penalties:

  I. If the exploitation be made on free ground the penalties shall consist of from one to two year’s imprisonment and a fine of from 2,000 to 5,000 pesos;

  II. If the exploitation be made in denounced or titled claims, the penalties shall consist of those imposed by the preceding clause, without prejudice to the indemnity corresponding to the denouncer or concessionaire of the claim; and

  III. Should a denouncer exploit a claim before obtaining title thereto, he shall suffer the penalty of disqualification for the acquisition of title to the said claim, and shall forfeit to the nation the capital invested.

• Art. 114. The penalties established by Article 497 of the penal code shall be applied to those who destroy or change the location of monuments marking the surface boundary lines of petroleum claims.
• Art. 115. When not otherwise provided, the crimes committed by the infraction of this law, and the civil responsibilities arising therefrom, shall be subject to the penal code of the Federal District.
• Art. 116. When through heritage or by a court judgment in payment of a debt, a foreigner acquires possession of or property rights to the concession of a petroleum claim, pipe line, storage station or refinery, the judicial authorities, previous to granting judgment or recognizing the heritage, shall demand from the said foreigner the certificate to the effect that he has complied with the requisites of Article 27 of the Federal Constitution.¹
• Art. 117. When through heritage or by court judgment a foreign corporation acquires possession of or the concession to a petroleum claim, the judge shall demand the incorporation of the said company as a Mexican company, previous to adjudging the property or recognizing the heritage.
• Art. 118. The Executive of the Union shall procure that properties and acquired or possessed rights shall not be secured in contravention of the precepts of Articles 116 and 117.
• Art. 119. In the case of pro indiviso lands treated of in Article 21, should any of the coowners fail to pay, after being notified to do so, his corresponding proportion of the taxes or of the expenses incidental to the obligations imposed by the concession, any other coowner may make such payments thereby increasing his proportion of the land. Should several coowners petition to be allowed to make the payments of the defaultant, the laws of chance shall decide who make the said payments.
• Art. 120. The Department of Industry, Commerce and Labor may at any time send its inspectors to visit the petroleum claims and the installations thereof used directly in the exploitation operations. The objects of such visits shall be the following:

  I. To determine if the regulations and provisions covering exploitation are being duly complied with;

  II. To obtain scientific and statistical data regarding the petroleum industry, and such further data as the public interests may demand; and

  III. To determine the existence or non-existence of invasions of free ground and also of another claim on petition of the authorized party.

• Art. 121. The Department of Industry, Commerce and Labor may order the suspension of petroleum works which do not conform to the regulations covering exploitation, based on the adverse report of the inspector, or information furnished by the local authorities. The order of suspension shall remain in effect as long as the basic cause therefor exists.
• Art. 122. In urgent and serious cases, suspension may be decreed on petition of the Governor of the State or of the municipal president, without previously fulfilling the requisites established in the preceding article.
• Art. 123. In all cases of suspension of works not based on the report of an official inspector of the Department of Industry, Commerce and Labor, the latter shall order that a visit of inspection be made at the earliest possible moment.
• Art. 124. The Department of Industry, Commerce and Labor shall determine the number of agencies of the petroleum bureau and the jurisdiction of each according to the volume of work involved.
• Art. 125. When the concessionaire of a petroleum claim furnishes satisfactory proof to the Department of Industry, Commerce and Labor of the loss of his original title, a duplicate title may be issued at his expense, in which the reason for its issuance and the cancellation of the original title shall be expressed.

Transitory Articles

First. This law will take effect one month after its promulgation.

Second. Those lands in which capital has been invested prior to May 1, 1917, for the purpose of exploration or exploitation of petroleum, are not denounceable nor subject to the relative precepts of this law. To that effect, the holders of such lands (owners or lessees) shall substantiate their rights of possession, before the Executive, within a period of three months counting from the date of enactment of this law.

Claims owned in fee shall pay the territorial and production taxes imposed by the decree of July 31 of this year, or those which may hereafter be established under the denomination of rents and royalties, on the claims to which titles are issued in conformity with this law.

Claims held under lease contracts shall pay, during the life of such contracts, the taxes fixed by the said decree of July 31 of this year. This privilege in favor of the lessees will terminate upon the expiration of their lease contracts, which latter may not be modified or renewed, even though the power of the contracting parties to do so may be stipulated therein. Upon the expiration of the contracts, the exploiters may, during the three following months, obtain titles in their favor to the respective claims, upon payment of the title tax.

The exploiters of claims covered by this article must comply with the regulations and other provisions of exploitation which govern titled, petroleum claims.

Third. Owners of land, or lessees holding contracts made prior to May 1, 1917, who have not invested capital in petroleum exploration or exploitation operations, shall enjoy during one year counting from the day on which this law is enacted, the right of preference to denounce the underlying claims, providing they substantiate their rights before the Executive during the period of three months following the second date mentioned. When a single piece of ground is denounced by various lessees, title shall be issued to that lessee holding the latest contract.

Fourth. For the purpose of substantiating their rights covering oil lands, referred to in the two preceding articles, the interested parties may use the certified documents which have been filed previously with the Department of Industry, Commerce and Labor.

Fifth. Those owners or lessees who have invested capital in petroleum exploration or exploitation operations, after the first of May 1917, and previous to the enactment of this law, may obtain titles in their favor to the underlying petroleum claims upon payment of the title tax, and upon furnishing proof within the period of three months from the date this law is enacted, of having had authorization from the Executive to effect the operations mentioned.

Sixth. All denouncements of petroleum claims filed in the agencies or in the Department of Industry, Commerce and Labor, and dispatched in accordance with the provisions contained; in the decree of August 8 of this year, are valid.

1. Not printed.
1. This refers to renouncement of citizenship rights as regards property held by foreigners in Mexico.—Translator.
1. This refers to renouncement of citizenship as regards property rights.—Translator.