PETROLEUM
Some of the natives of Venezuela knew of the properties of petroleum as far back as 1856, and used the oil in lamps. Deposits were later discovered in the interior of the country, particularly near the banks of the Venezuelan lake of Maracaibo. In the year 1883 the Government granted the first concession to a local organization, called the "Compania Petroleo del Táchira," which installed a hand-drilled well in the state of Táchira; this plant is in operation at the present day, although old-fashioned methods are being used to obtain the oil from the ground, consequently the production is negligible. Immediately after this discovery several concessions were granted to various interests, but they lapsed because no work was started on them. No further interest was shown in petroleum until 1893, when a general mining law was enacted which included provisions for petroleum and asphalt. This law was in force until 1904 when a new code was enacted, containing special legislation relating to petroleum and asphalt. The main provisions were that claims could no longer be taken up by denouncement proceedings[16] but only under a special contract entered into with the Federal Executive, the President.
[16] Old Spanish law which provided that a person or party of persons could stake out any unowned piece of ground, and then establish claim for it.
In 1905, during Castro's administration, the mining law of 1904 was remodeled. The act was very short,—containing not more than 13 articles,—but it placed in the hands of the Executive a great deal of power that he had heretofore not possessed.
All dealings regarding concessions were to be negotiated directly with him. In the year 1906, pursuant to authority delegated to the Federal Executive, an Executive decree was formulated which provided for the whole procedure under which concessions were to be granted. Under this, important initial steps were taken and many concessions granted. Four of these concessions are in force to-day; namely:
1. The Colón District (Colón Development Co., Ltd.)
2. The Maracaibo and Bolívar District (Venezuelan Oil Concessions, Ltd.)
3. Buchivacoa District (British Controlled Oilfields, Ltd.)
4. Silva and Zamora District (North Venezuelan Petroleum Co., Ltd.)