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Thursday, 2 November 1967


Mr WENTWORTH (Mackellar) - I move:

In sub-clause (1.), paragraph (a), after 'regulations' insert 'and if the permittee, during the currency of the immediately expiring term of his permit has expended a sum (excluding any subventions from a State or the Commonwealth) in exploring and developing petroleum of not less than one million dollars per block (or such greater sum as may have been prescribed by the Designated Authority under such expiring permit) upon the whole number of blocks included in such expiring permit and upon blocks included in a production licence over an area or areas included in such expiring permit during such currency'.

Clause 32, as it stands at the moment, provides quite new rights - something which I think is almost without precedent. It provides that the permitee may have his permit renewed, which is the normal thing, but if he has complied with unspecified conditions then he shall have his permit renewed. This confers a permanent right which does not exist, as far as I understand, in the State grants. It is new, unprecedented and semi-permanent. I am not questioning that there should be a right of renewal for any company which has spent an adequate amount on exploration, but an adequate amount must be spent. I am not satisfied to leave to some designated authority the right to set these work permits without a guiding code or a minimum. To me this does not seem to be reasonable.

Although the Minister for National Development (Mr Fairbairn) has given a new assurance that the particulars will be published, I point out that such a provision is not in the legislation. The relevant clauses, 76 and 94, provide for the publication not of this information but only of such information as the designated authority chooses. Although the assurance given- "by the Minister may be good, I do not believe it is sufficient to cover legislation which will operate for many years and which will come under the administration of people whom the Minister does not know. I refer to Ministers of the future. The provision in relation to publication is insufficient. The present position is that the permitee can have such renewal after 6 years as may be determined by the designating authority. But if he wants anything more than that - if he wants to have a prescriptive right to renewal - then he has to spend money. The absolute right to renewal by the permitee would accrue only if the permitee during the currency of the immediately expiring term of his permit had expended a sum, excluding any subventions from a State or the Commonwealth, in exploring and developing petroleum of not less than one million dollars per block, or such greater sum as may have been prescribed by the designated authority under such expiring permit, upon the whole number of blocks included in such expiring permit and upon blocks included in a production licence over an area or areas included in such expiring permit during such currency.

The provision is a fair one because it relates not only to exploration but to production. It will spur on the companies to produce. The amendment does not state that the companies shall spend the money in exploration. If they produce and spend the money in production that will satisfy the requirements. The amendment will not catch Broken Hill Pty Co. Ltd and its partners in Bass Strait and Gippsland because their plans for expenditure on exploration and production are already above the prescribed minimum. They will be free from the operation of the amendment. If any company intends to operate as well as BHP and its partners are operating in Gippsland, good luck to that company; let it have what it can get. These people are producing oil. But do not let such a company adopt a dog in the manger attitude and sit indefinitely on areas which it is not adequately exploring.

My friend, the honourable member for Evans (Dr Mackay), has said that it costs $2m to drill one offshore exploration hole. His figure may be a little high; it is a higher figure than the one I had in mind. But let me adopt his figure. On the basis of that figure, in order to maintain a right over 6 years, during that period a company would have to drill only one hole in SO square miles. I ask the Committee to have some sense of proportion in relation to this. Fifty square miles is a lot of territory. To ask for one hole in such an area in 6 years in order to have a right of renewal over that area is not asking too much.

If a company does not want to do that then it has three options. Firstly it can rely on its position as it was before the Bill was passed. .That is to say, it would have the right of renewal of so much of its permit as the Minister or the designated authority would allow. Secondly the company could discard some of its area before its lease expired. The effect of this would be that it would not have all the low cards in its hand to enable it to discard. If for example, it had 400 blocks, 10,000 square miles, and it felt it could spend only a certain amount, then in the fifth of sixth year of its first term it could voluntarily relinquish a portion of its area. Then it would be left with a smaller area and it would discard from a smaller area. This is an option open to it. Thirdly, it could spend the money and go ahead in that way.

The figures I have suggested are very modest figures, though they may seem big. The people taking the side of the oil companies refer to the expenditure of $400m and say that nobody spends more than tha! in the whole world. But the reason that the figure I have given seems big is that the exploration permits are gigantic, immense and quite unjustifiable. Let the company have its big permit for 6 years. During that time it can go ahead, makt its seismic survey and its first delineations, and it can see what the area is like. Then, before it comes to the halving process provided in section 31, let it discard those areas that it does not think are of any consequence. When it conies as a matter of right, its right, to require a renewal of the permit at the end of 6 years, it will not have all the low cards in its band and be able to discard without loss. I hope that honourable members see the point. The company is to be given its 6 years without interference If it finds oil as BHP. has done and if it develops oil, this clause will npt .catch it at all. If it spends an adequate amount on exploration, this clause will not catch it. But if it does not find oil and if it does not spend an adequate amount on exploration, let it leave the area for somebody else to come in. Do not let us fall for this dog in the manger policy that the companies are trying to force on us.







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