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Joint Statement by the Minister for National Development and the Minister for Customs and Excise

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ND 99


DEVELOPMENT (Hon. R.W. SWARTZ, M.P.) and the


RELEASE; Immediate

The Minister for National Development (Mr. Swartz)

and the Minister for Customs and Excise (Mr. Chipp) today

announced the Government's policy decisions following its

consideration of the issues that would arise if the production

of indigenous crude oil .came to exceed the Australian market's

ability to absorb it.

The Government's indigenous crude oil absorption

policy guarantees to the producers, up to September 1980,

the Australian market for that crude oil. In view of the

possibility that local crude oil production could become in

excess of the Australian market's ability to absorb it,

the Government consulted industry as to how, in the context

of the guaranteed market, any such excess production should

be dealt with. After consideration of the industry's views,

the Government accepted advice that it should establish and

announce its policy ahead of the event.

Accordingly the Government has decided thats-(i) It re-affirms the principle of pro-rationing.

By this is meant the equitable allocation of

the amount of oil to be produced from each

of a number of pools or reservoirs to meet the

guaranteed domestic market for indigenous crude


(ii) This principle will be implemented when and if

crude oil productive capacity exceeds the quantity

which the Government determines should be absorbed

into the Australian market.

(iii) The basis of the pro-rationing scheme will be an

assessment of the pro-rateable reserves of

individual oil pools.

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(iv) Prior to the advent of a pro-rationing situation

the Government will set up a group of Commonwealth

' officers to advise it on the share of the local

market to be allocated to each producer in

accordance with the above basis. All parties

with a legitimate interest would be free to pro­

vide data and make submissions to the group to

assist it in formulating its advice to the


(v) At the proper time consideration will be given

to setting up a more formal and permanent

administrating authority if circumstances

require or justify this.

(vi) Exceptions to the scheme will be kept to the

absolute minimum while at the same time reserv­

ing the Government's right to give special

consideration to any particular field the ’

exploitation of which has important implications

for national security, economic or social welfare

or regional development.

(vii^f) Any production of indigenous crude, surplus

to the designated Australian market require­

ments, may be exported by the oil producer

provided always that the Government is

satisfied that the then current reserve to

consumption ratio is not unduly low and that

the strategic situation does not indicate a

need to preserve indigenous reserves.

The Ministers pointed out that by clarifying and

announcing Government policy in advance of an excess production

situation coming into actual existence the Government had

put itself in a position to take prompt action when need

arose. That the industry should be thus informed of the

policy in advance should tend to the encouragement of explora­

tion for petroleum. .

Canberra. "

15th December, 1 970.