Mexican Expropriation of Foreign Oil, 1938

March 18 – Aniversario de la Expropiación petrolera – Anniversary of the Oil Expropriation


Mexico President
General Lázaro Cárdenas

The Mexican oil expropriation (Spanish: expropiación petrolera) (also petroleum expropriation, petroleum nationalization, etc.) was the expropriation of all oil reserves, facilities, and foreign oil companies in Mexico on March 18, 1938. It took place when President and General Lázaro Cárdenas declared that all mineral and oil reserves found within Mexico belong to the nation.
It is one of the Fiestas Patrias of Mexico, celebrating the date when the President, General Lázaro Cárdenas, declared that all oil reserves found in Mexican soil belonged to the nation, following the principle stated in the Article 27 of the Constitution of 1917. This measure caused an international boycott of Mexican products in the following years, especially by the United States, the United Kingdom and the Netherlands.

Silhouette Three Oil Pumps over orange sky. | TebNad

Silhouette Three Oil Pumps over orange sky. | TebNad

Mexican Expropriation of Foreign Oil, 1938
On March 18, 1938, Mexican President Lázaro Cárdenas signed an order that expropriated the assets of nearly all of the foreign oil companies operating in Mexico. He later created Petróleos Mexicanos (PEMEX), a state-owned firm that held a monopoly over the Mexican oil industry, and barred all foreign oil companies from operating in Mexico. The U.S. Government responded with a policy that backed efforts by American companies to obtain payment for their expropriated properties but supported Mexico’s right to expropriate foreign assets as long as prompt and effective compensation was provided.
Prior to expropriation in 1938, the oil industry in Mexico had been dominated by the Mexican Eagle Company (a subsidiary of the Royal Dutch/Shell Company), which accounted for over 60% of Mexican oil production, and by American-owned oil firms including Jersey Standard and Standard Oil Company of California (SOCAL – now Chevron), which accounted for approximately 30% of total production. However, in Article 27 of the Constitution of 1917, the Mexican Government asserted ownership of the “subsoil,” including any natural resources discovered below ground. The possibility that the Mexican political leadership might exercise its rights complicated relations with the United States until the Calles-Morrow agreement of 1928, which temporarily alleviated tensions by reaffirming the rights of oil companies in the territories they had worked prior to 1917.

Civic Holiday:
Like statutory holidays, these are observed nationally. But, unlike statutory holidays, it is not mandatory to provide employees with a paid day off or holiday pay.