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Thursday, 3 December 1936


Senator Sir GEORGE PEARCE (Western Australia) (Minister for External Affairs.) [11.17]. - I move-

That the bill be now read a second time.

The Petroleum Oil Search Act 1936 appropriated £250,000 for the purpose of advances to persons engaged in drilling operations in connexion with the search for oil, and in payment of salaries and remuneration to persons employed by the Minister under the act. To advise theMinister in connexion with expenditure under the act, a technical committee, consisting of Dr. Woolnough, Dr. Wade and Dr. Ward has been appointed. The committee recommended that, in addition to making advances for drilling operations, moneys should be applied for the purpose of conducting geological surveys in Australia and purchasing drilling plants which could he let out on hire to persons engaged in drilling for oil. The Government approved of the committee's recommendation, and the bill now under consideration makes the necessary amendments to the original act.

The technical committee was of opinion that the restriction of assistance to deep drilling may defeat the primary object of the legislation, as bores may be sunk at sites without adequate preliminarygeological survey. The drilling of a deep hole without the initial steps designed to supplement superficial data may result in an expensive failure, which might deplete the resources of the companies engaged in the search, and discourage shareholders from further participation in prospecting operations. The committee considered, therefore, that the Government should provide assistance to enable companies to conduct the necessary preliminary geological surveys to justify the sinking of deep bores. Assistance towards geological surveys will be confined to companies operating in Australia. The subsidy will be at the rate of £1 for every £2 provided by the companies. In view of the facts that the majority of the drilling plants engaged to-day in Australia on the work of boring for oil are out of date, and that there is a rapid evolution of such plants within recent years, particularly in America, the committee considers that it would be wise to obtain a few of these plants for hire to companies requiring them, rather than to allow companies to waste their resources in the purchase of unsuitable plant. Provision, therefore, has been made in the bill for moneys to be expended in the purchase of drilling plants, and for the Minister to let the plants out on hire to companies.

For the present, the Government does not consider it necessary to give this new form of assistance to companies operating in New Guinea. The Papua Oil Development Company Limited holds approximately 20,000 square miles under permit for a period of twelve months from the 1st September, 1936. The company must spend at least £15,000 during each of the two periods of six months for which the permits will be in force. The Oriomo Oil Limited holds about 12,000 square miles under permit for a period of twelve months from the 1st November, 1936. The company must spend at least £5,000 during the first six months, and £7,500 during the second six months of the currency of the permit. Island Exploration Company Proprietary Limited has approximately 21,000 square miles under permit, for a period of twelve months from the 1st November, 1936. The company is required to spend at least £15,000 during each of the periods of six months that the permits will be in force.

All of the companies in question will be eligible to apply for financial assistance in connexion with drilling operations, but in view of the large areas granted to them under permits, and the stipulated conditions as to the amounts to be expended, it is considered that there is no necessity at the present time to subsidize them for survey work. The work that must be carried out during the twelve months for which the permits art; in force must be in the nature of survey work. The granting of subsidies for survey work would be tantamount to relieving the companies of a large proportion of the expenditure they must incur in accordance with the terms of the permits. The conditions under which companies are operating in Australia are entirely different from those in force in respect of the three companies in question in Papua. It is the considered opinion of the three geologists of the committee which is advising the Government in this matter that the granting of subsidies for geological survey work in Australia is essential. The Government has decided, therefore, that subsidies for survey work shall be restricted, for the present, to companies operating in Australia.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.







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