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Wednesday, 11 April 1973
Page: 1333


Mr FAIRBAIRN (Farrer) - This whole story which has been unfolded tonight is really just a storm in a teacup. In his blustering manner which is so characteristic of the Minister for Minerals and Energy (Mr Connor), he has made a great point of how he has been threatening and standing over some of the oil companies.


Mr James - What about the people's government?


Mr SPEAKER -Order! The honourable member for Hunter will restrain himself.


Mr FAIRBAIRN - it is strange that the companies the Minister picks out seem to be the Australian managed companies, notably the Broken Hill Pty Co. Ltd and Woodside-Burmah Oil NL. I shall refer to BHP. That company was not referred to in the list given by the Minister but he referred to the company in the House last week and said that he »»d not received the information whir'- 'e required from it. What is the situation? Under the Victorian legislation there ure pint .is for 2 types of licences. One is a permit to explore and the other is a licence to produce. So far as the permits are concerned, all 'he information required by the Designated Authority has been received by it. However, there is a small backlog of information in relation to the licence to produce because 'he Victorian Department of Mines has hat! a problem with the lack of a suitable petroleum geologist. That position has now been rilled and the backlog is now being overcome. Surely that is a pretty minor matter to bring before this House.

The Minister for Minerals and Energy has made it clear that he will show the oil companies who is master and who is servant, ls there really any need for this? Every company wants to have good relations with the Government. I am sure that this applies to every company which is seeking oil. Of course these companies will comply with every reasonable request. It is not always easy to do so, particularly as, in some cases, the companies are operating in extremely difficult conditions in remote areas. Another factor is the problem of cores. All companies realise that they must supply cores if they accept an oil search subsidy from the Government.


Mr James - They did not want to supply the cores. They did not want the people to know.


Mr FAIRBAIRN - That is completely wrong.


Mr James - Are you on the people's side or on the side of the international consortiums?


Mr SPEAKER


Mr FAIRBAIRN - Do honourable members realise the problems of core cutting? If the drilling is at a depth of 10,000 feet, it is necessary to pull up, unscrew and stack the drilling pipes, put on the core cutter and go down again. This procedure is expensive. This is why the companies are trying to get some other means of obtaining cores such as by the use of a side wall slicer, which make it easier to obtain cores. I am informed by WoodsideBurmah Oil NL that as a result of the request by the Government it has supplied a very much larger number of cores in recent times. I am sure that this company, from the correspondence, has always done its utmost to co-operate with all governments. I quote its reply which was sent to the Minister for Minerals and Energy recently. It states:

The Board of Woodside-Burmah Oil N.L. was surprised and disturbed to read in this morning's press remarks attributed to you in Parliament yesterday criticising us for not supplying information to the Government.

Please let me assure you again that at all times this company has been fully aware of its responsibilities under the Petroleum (Submerged Lands) Act, 1967 and to the best of our understanding had satisfied the Commonwealth and State governments in this respect.

We have taken great care to keep the Designated Authority in Western Australia supplied with information required under the Act, in some cases have exceeded those requirements, and would have no reason whatsoever for withholding the same information from the Commonwealth when it was requested.

In recent months we have discussed the matter of supplying information at various levels in both State and Federal Governments and have repeated assurances of our willingness to co-operate fully in this area. We have both verbally and in writing asked for a meeting with those concerned in your Ministry to discuss the information required to ensure no possibility of misunderstandings.

You were reported to have said 'it was difficult to obtain information from Woodside-Burmah'. This has not been the case and we again repeat our desire to work closely with Government as has been our policy since we commenced operation.

The question of reserves of natural gas on the North West Shelf was also reported to have been raised. We agree we were reluctant last December to make a public statement about recoverable reserves of natural gas.


Mr James - Is this a confession?


Mr FAIRBAIRN - The letter continues:

This reluctance was quite understandable in view of the difficulty in giving an accurate assessment before full reservoir studies had been completed. At that time we pointed out that it was necessary to drill a number of wells and to conduct extensive reservoir studies before any responsible or meaningful statement could be made.

In view of the recent independent studies by our consultants revising our preliminary reserve estimates for North Rankin we believe our attitude at that time was quite correct and has been fully vindicated.

It finishes by stating:

We can assure you Mr Minister it is not necessary, nor has it ever been necessary, for threats to be made to obtain information from us. We stand ready at all times to work with and discuss with Government Authorities our exploration and development activities in Western Australia.

Let me come back to that last small portion of the letter because the honourable member for Hunter (Mr James) has been interjecting about the fact that WoodsideBurmah agreed that it was reluctant last December to make a public statement. Of course it was reluctant. Anyone who knows anything about mines would realise that nothing can be more disastrous than to put forward a statement of reserves, be they minerals, oil, gas or whatever until they are really accurate figures. We all know the problems that have existed in the past and I was surprised to hear the Minister for Minerals and Energy say that if they do not make an assessment of reserves, the value of the shares on the stock exchange could be affected. What could affect the value of shares on the stock exchange more than putting out an early report before it was really accurate?

As I said, this decision was vindicated in this case because in the case of the North Rankin well the Company had to reduce the estimate of the quantity of reserves from 10.7 billion cubic feet to 7.9 billion cubic feet of gas. Of course, we have seen this happen in other cases. I know that all of us recall the unfortunate affair of the assessment by Queensland Mines Ltd of its Nabarlek field.

Nothing could be worse than to make an assessment too early, ahead of time, before the prospect had been fully drilled, cored and assessed. But I state again that the Chairman of Woodside-Burmah Oil N.L., Mr Donaldson, believes that he has given everything that he is possibly required to give and, in some cases, more. He recently asked Mr May, the Designated Authority and the Minister for Mines in Western Australia, whether he had received all that he wanted and Mr May said that he had. In fact, if honourable members care to look at the Western Australian Hansard of 22nd March - I do not have a copy in front of me - they will see that the Designated Authority, Mr May, said that Woodside-Burmah had been co-operative. In fact, I think he said 'extremely co-operative'.

But what is the story in this case? On 5th April 1972, Woodside-Burmah was sent a circular request from the Under-Secretary for Mines of Western Australia. A similar circular went to a large number of companies seeking further information. Unfortunately, this letter was not received by Woodside-Burmah. It is of interest to note that the letter was not registered. If it was important, one would have expected that it would have been registered or that it would have been followed up. But neither of these things happened. In about December or January, Woodside-Burmah had its attention drawn to the fact that there was still some information which it was expected to give. The company has done this as well as it can. I believe that the situation now is satisfactory. In fact, the Minister believes it is satisfactory because, in his reply to the company on 2nd March 1973 he said that the Acting Director of the Bureau of Mineral Resources reported that there was then no backlog of material from Western Australia in respect of wells or geophysical survey, that the situation was generally satisfactory in regard to the receipt of current statutory and operational material and that there was still some delay in the receipt of weekly progress reports, but that action to rectify this had been taken. On 8th March - the following week - the Director advised that the Bureau's assessment of gas reserves on the north-west shelf should be completed by 19th April. So, as I said, 1 think the situation now is satisfactory.

I said that this was a storm in a teacup. Perhaps I can change the metaphor and say that the Minister is attempting to make a mountain out of a molehill. He threatens drastic action. Why he ever saw fit to table this correspondence is quite beyond my comprehension. It shows that the Minister has once again demonstrated that he is temporarily unfitted to hold the important office which he now holds, in view of the views he holds not only on mining but also on miners.







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