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Thursday, 2 November 1967


Mr WENTWORTH (Mackellar) - I said previously that 1 wanted to speak to clause 31 of the Bill. These are the discard provisions. This clause provides that after 6 years a company shall discard half its area; and after another 5 years it will discard a further half and so on. This is particularly apposite in relation to the recent remarks made by the honourable member for Evans (Dr Mackay), lt is perfectly true, as he said, that oil is sometimes found in areas which have been discarded by other companies, but by and large the areas they discard are not as good as the areas they retain. Furthermore, in large areas of 10,000 square miles it is often possible to delineate some areas which have virtually no chance of producing oil. In regard to clause 31 let us -consider what happens with a permit of 400 blocks or 10,000 square miles. Let us suppose that the permit is taken out early next year, in 1968, in a few months' time. In such circumstances the area would remain at 10,000 square miles until 1974; at 5,000 miles until 1980; at 2,500 miles till 1985; and by 1990- a fair time ahead - it will still be 1,250 square miles. In addition, there will be excise which will not be counted for computation purposes in producing areas in which oil may have been found. We are now talking about a period which is nearly 30 years ahead. During this time the companies will be able to take up any pools of oil they find. We hope that they find a lot of oil. In addition, the companies will be maintaining for exploration purposes the best of the area and as they obtain more information their judgment as to what is a good area and what is a bad area will be improved.

Oil pools are in area relatively small. A pool, of course, depends on the thickness of the producing sands. However, a pool of 10,000 square miles in area is quite a sizeable one. If the sand is thick it may even be a giant pool. In 1990 a company which has 10,900 square miles will be left with 1,250 square miles of the choicest area out of every permit. In addition it will have all of the oil pools which may have been found over the whole area before 1990. This simply is not good enough. I can well understand that for a couple of years and even for 6 years perhaps, that these giant permits should be maintained. I am even prepared to concede that the multiple permits which have been given under State law should be honoured. But I am not prepared to concede that these discard provisions are the best and fairest. I am not prepared to concede that they are good enough; they do not give Australians an entry into the industry. But the crux of the matter is not simply that one wants Australian ownership. This is important, but it is not the most important matter. The most important matter is that there should be producers in the Australian field who are not tied to overseas interests which stand to gain financially by limiting the production of oil from Australian sources.

I know that under the Bill the Minister for National Development (Mr Fairbairn) has power to step up production from a discovered pool, but he does not have the power to bring the pools into initial discovery. If companies do not choose to declare, make known or drill their fields because they have enough oil already they will be able to sit for years on all the best areas. There must be some good producing - areas in Australian hands, otherwise we shall be at the mercy of overseas companies to whose financial interest it would be to curtail oil production in Australia. Once the ring is broken it is all right. Under this legislation there will be no chance of breaking the ring. I wish to move my first definite amendment in relation to the next clause, so I will not detain the Committee longer by speaking on these particular clauses. I hope to move an amendment in relation to clause 32.

Clauses agreed to.

Clause 32. (1.) Where a permittee makes an application for the renewal of a permit, the Designated Authority -

(a)   shall, if the permittee has complied with the conditions to which the permit is subject and with the provisions of this Part and of the regulations; or

(b)   may, if the permittee has not so complied and the Designated Authority, is satisfied that, although the permittee has not so complied, special circumstances exist that justify the granting of the renewal of the permit, inform the permittee, by instrument in writing served on the permittee -

(c)   that he is prepared to grant to him the renewal of the permit; and

(d)   that he will be required to lodge a security for compliance with the conditions to which the permit, if the renewal is granted, will from time to time be subject and with the provisions of this Part and of the regulations.







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