THE IMPERIAL OIL SUPPLY

Dominion, Volume 11, Issue 171, 9 April 1918, Page 6

THE IMPERIAL OIL SUPPLY

AN "INDISPENSABLE CONCOMITANT." One of the products of the war is the recognition of oil as an indispensable concomitant- of Empire. The importance of possessing ample supplies of oil has been .fully demonstrated, and, as was recently pointed out by Jlr. 'Walter Long in the House of Commons, oil is perhaps more important than anything else. "You may have men, munitions, and money, but if you have not got oil, all other advantages will be of comparatively little value." Apart from the demands for ordinary motor transport, it would not be possible to carry on an aircraft service or conduct submarine or naval warfare in neueral, without oil. Indeed, the article is of such supreme importance that it may fairly be asserted that it would be suicidal for a nation to enter again into war without an ample supply, absolutely 'free from foreign control, of fuel oil for the service of its naval and mercantile fleet, of benzine for its motor transport and aircraft, of oil for the lubrication of the many mechanical appliances which enter so largely into modern warfare, and of aromatic hydrocarbons for the manufacture of high explosives. A charge of neglect in this direction cannot be brought against Great Britain, and, indeed, it may truly bo said that our policy in connection with oil has been one of much wisdom and foresight. The credit for carrying out a policy of securing nniplo supplies is due to Mr. Winston Churchill and his naval advisers who adopted and secured Parliamentary sanction for the recommendations of a Special Committee appointed to advise on the question of oil fuel for the Navy. The method adopted was to take a substantial financial interest in the "Anglo- ! Persian Oil Company,", a concern formed to exploit oil in Persia, In all, the nation has invested £'2,000,000 in ordinary shares and £200,000 in 5 per cent, debenture stock for this undertaking. Since the outbreak of war the company has rendered important service to the Allied cause-, primarily by providing oil and oil products to the British Government, while a further benefit has been secured, inasmuch as the Persian source of supply has, bv the competition which it has created, saved the nation very considerably, enabling the Government to purchaso the balance of its sullies at lower prices than would otherwise have been the case. The company has, fo far, only developed a comparatively small part of the area ,covered by it's concession, but the output therefrom is so large than it exceeds the pre-war production of the whole of the ltuiuanitni and Glnlician oilfields.

The nation's investment has already proved remunerative. For the year to March 31, 1917, the company made a profit of £'415,000, onabling 'a dividend of 5 per cent, to be paid on its ordinary shares. For the current year the chairman estimates that the profit will reach a figure between £800,000 and £1,000,000. Moreover, these figures arc not "war profits," inasmuch as practically the whole of the products were either contracted for before the war, or, iutho case of those contracted for since, have been sold at. pre-war prices. Tho value of the nation's investment may bo further gathered from the statement of the chairman that, if it wore possible to assume that the Government reponted of its bargain, he would undertake to find a. purchaser for its 2,000,000 shares at not less than £6,000,000, and probably for as much as £8,000,000, and he justly claimed that this increment on an investment of £2,000,000 which has only been locked up for an average period of eighteen months is a magnificent one. He went on to predict, moreover, that this incremont is only a small instalment of that which may be looked for, with confidence, in fivo or ten years hence, when the company will have been able to build refineries more commensurate with the vast supplies of crude oil that it lias at its disposal. And, indeed, when extensions now under contemplation are completed, it is expected that, in caso of need, the company will be in a position to provide the whole of the British naval requirements of fuel oil, and also the requirements of the Government gonerally for all petroleum products, though naturally it would not be wise either politically or economically to rely upon any one country as the sole source of supply. As regards the future, a suggestion lias been made by the chairman' that seems worthy of attention. He asks for an extension of the policy initiated when the Government secured a controlling interest in the company, and suggests the formation of an "all British" company, similarly controlled, to deal with the development of oilfields, outside of the British Islps. "This company might absorb all the existing British oil-producing com-' panics, and at the same time undertake the examination and exploitation, so far as concessions are obtainable, of all the known oil territories of the world not already taken up by these and other companies, but directing its attention more narticularly to the British colonies and dependencies and to countries whose friendship can be relied upon." v