DEVELOPMENT OF THE OIL INDUSTRY.

Dominion, Volume 6, Issue 1815, 30 July 1913, Page 9

DEVELOPMENT OF THE OIL INDUSTRY.

WHERE NEW ZEALAND STANDS.

A. COMPREHENSIVE REVIEW.

BRIGHT PROSPECTS AHEAD.

Wh'en the Giver of all good things planned this great and wondrous universe, He, in His wisdom, decided that all that was test for man should not ho spread out on the surface ready to his hand. He gavo'him tho fruits, the flowers, the tall tries, and the denizens of bush, plain, 1 nnd' stream, but there wero other 'treasures which wero locked securely in tho earth —treasures worth fighting for, worth probing for: And of these one of tho most precious, of all in tho light of modern advancement is surely petroleum—the glutinous secretion which exists in great subterranean lakes in tho bowels of the earth. Just a whisper of its presence was allowed to creep to tho surface, to tell of tho va§t stores of wealth lying thousands of feet below in huge reservoirs of its own devising. Although traces of oily exudations were observed any time during the last century, it was not until ISG3 that the possibilities of tho presence of mineral oil in commercial quantities became manifest. Tho great discovery was made in Titusville, Pennsylvania, United States of Airlerica, in. that year, and tho quick American intellect at once saw that hero was something that tho whole world wanted, and wanted badly. Tho Titnsville find led to the opening up of the oil field of the Alleghany; Valley; from there the industry spread to Ohio, and within a: year or two prospectors , w ; ere at work in mo3t'.of tho. States boring for oil with astonishingly sudcessful results. The great discovery led to prospecting everywhere, and as tho result the oilfields of Baku (South Russia), Galicia, Rumania, and Canada were all opened up within five'years of the original find.' and ■all those fields are still yielding oil in enormous quantities. But of all tho countries in which oil has been found, America lias mado the most'of her opportunities, and to-day thoro is scarcely a State which does not boast an oil-field 1 , nnd of these California and Texas are the richest producers. There it is one of the most perfectly developed industries in the wholo N world, and American oils aro exported to most European countries, tho Far East, and to most places south of tho Line. The most recently developed fields aro thoso of ths Republic of Mexico, Tvhich aro rapidly becoming big producers. Whilst in Europe.the industry has stood stationary for ten years or more, America

obtained a prospecting lease of 50 acres of tho Sugar Loaves Reserve from the Provincial Council. The gTant read— "Provided any well sunk and yielding petroleuim or any building erected with tho approval of the Government shall be found in the way of any public works, the company shall bo compensated for any loss they may suiter by tho closing of the well or tho removal of the building. The cxchisivo use of the land for the purposes specified to be granted to the company for two years without royalty or charge of any kind, whether petroleum is found in payable quantities or not, on the condition that the company shall sink or bore to a depth of not less than 120 ft. from tlie surface during tho first year, and not less than 210 ft. from the surface during the two years, unless petroleum in workable quantities shall be found at a less depth. Should the oil not be found before reaching the depth of 210 ft., the company to be allowed to continue in occupation on condition of reaching a further depth of 1201't. for each additional yew, tho royalty commencing whenever' tho oil is produced in saleable quantities. A royalty varying according to the depth to be paid on tho refined produce after the expiration of tho first two years, the rate of royalty being also regulated to a certain extent by the success of the undertaking, but not ill any case to exceed the following rates:— If oil is found within 120 ft. from the surface, 7 per cent.; from 120 to 210 ft., G per cent.; from 210 to 360 ft., 5 per cent.; from 3GO to 480 ft., 4 per cent.; below 480 ft., 3 per cent." "Oil or London!" ; A shaft was sunk at tho foot of the wharf at Moturoa, and the lirst oil tierncu was rigged over it. On January 13, 1800, tho people of New Plymouth tirst heard, the cry of "Struck oil!" Tho workmen had got down 20ft. when they found gas coining up in such quantities that they could not wcrk. Indeed, one had to bo removed to the hospital through swallowing an overdose of the gas. fco impressed wero the people with the prospects that tho. Provincial in his Financial Statement on • February 13, 18G6, reierred to "the sanguine hopes onteirtaiiicd of tho discovery-of tlie natural reservoir of petroleum that oozes at the Sugar Loaves." On March 17 the well was OOtt. deep, and small quantities of oil wero secured. At the end of tho year they commenced to bore in.earnest, wnen a placard was hung on the' shaft inscribed with tho daring resolve—''Oil or London." At this timo thero was a lot of oil talk. A Melbourne company (Bates, Sisebey, and Co.) applied' for ii nine years' oil prospecting lease over the remainder of tho Sugar Loaves Reserve, but thero was a good deal of .public feeling against foreign enterprise, and tho proposition was rejected. It is significant in tho light of wliathos since cotno about that Mr. Tlios. Kelly (who favoured the granting of tho lease) I during the debate in the Council drew I an alluring picture of "locomotives beI ing driven by oil, and the waters of our future, harbour iit "the Sugar Loaves ploughed by steam vessels whose motive powers aro generated by its combustion;" On May li) Carter and Co. reached tho 115 ft. level, and by August 25 had got -down to 174 ft. On October (i an outburst of gas forced the,water out of tho bore and with it came several gallons of crudo oil. ' Shortly afterwards negotiations brought about the sale of the well to the first Taranaki Petroleum Company. In April, 1860, tho People's Petroleum Company was formed. Operations wero.commenced about 200 yards from tho Moturoa Pa, and ,about 500 yards from tho. Alpha well. 'The;new. well was christened Victoria with-some ceremony by Mr.i'T. Balfour on the Queen's Birthday. At a . meeting held, en June 30 the following. were elected directors: Messrs. Bundle, Cartel, W. Humphries, Lawrence, Windsor, 'W. R. King, and Sncll. The sum of iC2OOO was expended • in boring, when in response to a proposition by tho Taranaki Petroleum Company it was decided to spend the balance of the capital (jointly with ' the older- company) in sinking the Beta well. This was done, and the People's Company was wound up. The Taranaki Petroleum Company went on with the gaine bravely and oil January 7, 1867, reported to tho shareholders that the company had spent .£2292 in boring two holes to 310 ft. and 318 ft. Three weeks Inter tho company purchased the Alpha well f rcm which tho first sample of oil was. forwarded to Sydney. The yield was then about eight gallons a day at 90ft. (the bore being plugged at 110 ft.) and worked with a pump. On Juno 18 (1807) some excitement was caused by tho Alpha well .yielding (on the pump) at the rate of 80 gallons per day. That yield did not last and all -but tho most enthusiastic lost hope in tbs undertaking. In June, ISGS, the company was wound up. There was a little moro boring work done about that time, but nothing worth recording savo that Mr, (afterwards Sir) Julius Vogel made an attempt to tap an oil llow near Messrs. Carter ancl C'o.'s leasehold without any success. Iy 1888 Mr. Henry A. Gordon, inspecting engineer to tho Alines Department, wrote a report on the oil-field in Taranaki and incidentally , stated: "The fact of tho oil being found in so narrow a belt and so near tlie surface seems to point to the conclusion that it is merely the product of . vapours exuding from the fissures below and that the main stratum coutaiuing oil occupies a largo area and may be some distance from tho place where it shows on the surface." Mr.. Gordon was one of the first t.o put forward the theory that - "tho oil itself would be discovered to run directly inlaud from the Moturoa wells. Petroleum and Iron. In tho '80's there was a good deal of oil-talk in New Zealand, which was commented upon by the Ixmdon press, and in ISBII the New Zealand Petroleum ami Iron'Syiuliehte, Ltd., with a capital of ■£35,000, was floated, with Mr. Charles Marvin (an oil expert) as managing director. The directors were:—Sir Julius Vogel, Mr. \V. Greaves. Mr. T. Barraclough. Lord 11. Ulick Brown, Hon. H. Stormont, Mr. Finch Halton, and Mr. J. 11. Pilling. Unfortunately, Mr. Marvin died just when he was about to leave England. Messrs. F. P. Corkill nnd tho Hon. O. Samuel were added to tho directorate. In May, 1891, tlie driller (Mr. Booth) reported to Mr. Samuel that he had struck oil at 900 ft, and that without going a foot deeper could pump 150 gallons a day. Mr. Booth suggested the sinking of other wells, but as tho remittances from England were insufficient, to meet expenses, tho works were shut down, and so ended another promising enterprise. The Hon. O. Samuel formed a syndicate in New Plymouth to purchase the property, plant, and rights, made an attempt fo clear out the bore which failed, and tho works were again closed. From ISHO to 1901 the following wells were drilled:—(l) By the English syndicate (depth 915 ft.); (2) New Ply- . liioutli and Sydney Co. (1021 ft.); (3) New Plymouth Petroleum Co. (153tft.); ditto, near Mr. Honeyfield's house, Breakwater (1975 ft.); ditto, Pitt's farm (2050 ft.); ditto, Okey's farm (302 ft.); ditto, Veale's ' farm (1220 ft.); Taranaki Petroleum Co., TToiveyfidid's farm (2052 ft.); ditto, near No ; bore (1080 ft.). From early in the 'Ofl's the Hon. Mr. Samuel maintained his interest in the oil industry, and it was that gentleman who brought Mr. R. Fair to New Plymouth as manager. Towards the end of May, ISDS, he reported having struck a flow of ton barrels a day (400 gallons). It is reported that thero was intent excitement in Now Plymouth, crowds flocking to the bore, which was capped, but was opened from time to timo bv a small fan so that fhe drillers might fill the bottles and cans of interested spectators. Mr. Fair announced that they would receive apolicatians and deposits fur shares, nnd thev flowed in from all parts of New Zealand and Australia. The Hon. 0. Samuel aud

Mr. Carter is chairman of the advisory board at New Plymouth, and lias as his colleagues Messrs. Okcy, M.P., Roy, and , Little._ He visited London as the representative of the old company at the time when negotiations were in progress for its being taken over by the 'i'aranaki (New Zealand) Oil Wells, Ltd.

has multiplied her oil-fields over and over again, As far as the British Empire' is concerned. there arc oil-fields in Canada., the West Indies,. New foundland, India, Further India, British Borneo, and New Zealand. There are also important prospective oil-fields in Australia and South Africa, where, contrary to expert expectations, surface indications havo been found during the past year. Considerable importance, too, lias been. attached, to the discoveries of oil-bearing country in some of the remoto parts of Papua. The rapidity with which' new sources of supplies havo been discovered-within, tho British Empire is the chief motive for tho action of the British, Admiralty in taking up tho matter of nil-fuel in tTio Navy with so much confidence. It is acknowledged that tho navy of no l'ower with any protenco to eminence is. from an engineering point of .view, so far advanced as our own, and tho latest statements by the Hon. Mr. Winston Churchill iu tho House of Commons,, to the effect that oil-fuel is to be used 011 quito a; largo scalo in the vessels oE the Navy, no matter in what part of tho world they are stationed, indicates pretty clearly tho very important part oil is to play iii the history of tho world. Oil-fuel increases the radius of activity of a vessel by about 40 per cent., and moreover allows a vessel to carry heavier armament 011 a smaller displacement than would be necessary in a coal-burning ship. And tho history of ''this wonderful industry is that tho more oil that is used in the world the greater becomes tho demand. What, then, is its future—who can say? Earliest Discoveries in New Zealand. It is meet that New Plymouth should be tho first oil-field in tho Dominion to be developed, as from that district enmo the knowledge that there were oil deposits of economic importance in thoso parts. Tho first white settlers, whalers, and others Lnd noticed oily patches 011 tho waters off tho Sugar Loaves—that queer group of pinnacle rocks near to I'lio Now Plymouth Wharf.- 'I'lio presence of oil thcro was noted by the Natives, who had a leg-end to the cli'ect that Seal L'nck (a submerged reef) thereabouts was once nit island of bituminous matter, which was set on fire by sonic supernatural tigcney and was burnt to below tho sea level. As far back as 1830 Dr. Ernest Diironbach, of Berlin, a Fellow of tho Royal Society of England, who visited tho locality, spoke of "a strong Bmoll of sulphuretted hydrogen gas about fi mile from high-water mark." The Natives, he said, had a legend thai an atin (spirit) was drowned at sea and was sfill undergoing decomposition. Later in 18(i5 that energetic man. the Jatc Mr. E. M. Smilli, formerly M.P. for New Plymouth, ' collected a samplo of oil, which he forwarded to the Birmingham Chemical Association. Mention is made of oil pools at sea, and oilv scum deposit, by, Mr. Charles Hursthouse'in his book 011 Taranaki. and 11 r. ,T. 1). Henry in his book mentions that he had seen' oil floating on tho surface of tho water off the liibi-Eibat field (Baku), at Sabine (Texas), and at Iloroera, and other points off the cast coast of New Zealand. No particular note was taken of the wonderful indications of oil until the end nl' tho year ISC."), when Messrs. Carter, Scott, Smith, and Pioss

OPERATIONS OF THE TARANAKI OIL WELLS, LTD.

Mr. Fair went to Sydney to form the company, but wnilst thero it transpired tnat water had got into the bore, and that the flow was only intermittent. It was then decided to abandon tho idea of iloating tho company by prospectus, and all deposits on shares were returned to applicants, an act that redounded to the honour of tlio gentlenieu concerned, and one which was prompted by tho knowledge that tho public had been misled by exaggerated reports tor which they were not responsible. | Many Changes and Boom I i In December, 1887, tho Taranaki Petro- • leum Company sunk its last bore (on i veale's farm), struck quartz crystal ' boulders, and ceased work at 1220 ft. Its ' plant aud property were purchased by air. L. W. Alexander, who sold to a small • iS'ew Plymouth syndicate (of whom Mr. 1 Samuel was the largest shareholder), and ■ drilling was continued, but without, success, and tho syndicate-dropped out. In ■ 1901 an. Adelaide Company (with llr. Pair as manager) made a feeble attempt to get on to payable oil, but losing heart. 1 (and money), sold to a new group, which was assisted by a Government grant, and continued drilling under the title of the Moturoa Petroleum Co. At tho end of April, 190G, came the famous "blow out" at the Birthday (Moturoa) Well, when all New Zealand suffered from a highly-in-fectious epidemic of speculative insanity, the dCo shares went up to .£ls without -sales being effected. Vast fortunes wero "in tho air." Up they went—J:ao, .£33, Still no business. Then came a .£lO offer from Wellington, and it few shares changed hands. A few were bought by an Auckland firm at i'so, and another salo at .652 took place. The company was merged into another—the Taranaki Petroleum Company, with a capital of .£120,0G0. During this momentous time, other prospecting companies were born, including the Bonithon (now drilling) and the Inglewood, but the next year saw a falling-otf. Mr. Simpson (of l'oti'olia) was secured as successor to Mr. Pair as manager of tho Taranaki Petroleum Co. The fame of IS'ew Zealand's oil-fields had gone abroad, and quotations-were asked for from Biri miugham and other centres. In this year, too, the Admiralty sent LieutenantEngineer Wheates to inspect the field and report. During December the faithful old Birthday "blew out" several ■ times. Still the industry was stagnant, aifd .sliares fell to ss. and 6s. Matters wore not improved by the two fires in 1009. Still, all this time some of tho bores had been giving quantities of oil steadily, and in 1911 quite a considerable quantity of the crude article was stored in the underground tanks, and local oil-men began to turn serious attention to realising on it. As they had no refinery, and 110 means of transport, unless advanco was made the whole industry must once hioro drcop • and die. But help was at hand. It'was then that'important 'London connections wero formed. The old Taranaki Petroleum Company had failed to raise suflic.ir.nt capital on a debenture is■siie' to'continue operations upon, modern 'lines,''alid as the result of negotiations with; London financial interests Mr. J.

Taranaki district alone. During the past week three new wells liavo started drilling at points close to the new refinery, and it is frankly acknowledged that this, and indeed all the enterprises displayed at the present time, is largely due to tho lead given to other operators by tho parent company. In the past three years the industry lias made its greatest strides, and it is not too much to say that during the period under notice (ho petroleum business has started to give every promise of becoming a, great and permanent success.

D. Henry, the British-colonial oil authority, was sent to the Dominion to look over the properties and -advise on the advisability of their being controlled bv a lieu* company. Tho histovv of thefo important negotiations has already been published in this paper. They Vesulted in the flotation of the present Taranaki (New Zealand) Oil "Wells, Ltd., of which Lord Ranfurly is the chairman and Mr. 0. Carter the head of the New Plymouth Advisory Board. Ono of the chief objects of the new company was the creotion of the refinery, which has been opened this week. During tho time the work of building has been in progress interest in the indnstry has been, steadily increasing, and the extent of this improved feeling will be peon when it is stated that some fifteen companies now exist for tlie purpose of expioiting and developing oil lands in tlie