Papers - Foreign Production - Review of Colombian Operation in 1929

The outstanding features of the Coloinbian situation for the year 1929 were legal and political. The passage of Law 84 and the promulgation of the Regulatory Decree 150 were recounted in the review for 1928, as was also the Presidential proclamation suspending this law and its accompanying decree until decision could be reached in the suits filed against them before the Supreme Court and the Council of State. Early this year the Minister of Industries, Jose Antonio Montalvo, announced the appointment of a commission of foreign experts to aid in drafting a new petroleum law. He requested all of the foreign experts employed not to consult with the oil company representatives in Bogota, and these experts were therefore shut off from receiving any suggestions from those who had actually operated in the country and knew the conditions under which operations would take place. It was to be expected that the provisions of a law suggested under such circumstances would not meet operating conditions satisfactorily. The specific objections are stated in O'Shaughnessy's South American Oil Reports (April, 1929). An especially qualified commentator observes that one of the curious provisions of the proposed law was the high royalty on gas—5c. per 1000 cu. ft. of gas produced. There was also a provision requiring 20 per cent. of the stock of the company operating in Colombia to be offered for sale to Colombians. The bill failed to pass Congress in the closing hours of the session. The Supreme Court, in the meantime, handed down its decision on Law 84 of the previous year and Regulation 150 covering the enforcement of that law. Contrary to expectation, the majority opinion of the Court practically affirmed the constitutionality of both the law and the regulatory decree, with the exception of Article 20 and parts of Article 21 of the decree which referred specifically to the registration of private properties. At the time the suit was filed against Law 84 and Decree 150 the operation of these measures was suspended by the Executive. Law 84 and its Regulatory Decree 150 still remain suspended as the Council of State has not yet brought in a decision upon the questions raised in the suits instituted by the various companies against the law and decree, and at the moment of this writing it appears unlikely that such a decision will be reached by that body.