State Control of Oil Resources

Hawke's Bay Herald-Tribune, Volume 81, Issue 46, 17 November 1937, Page 6

State Control of Oil Resources

Our Own Correspondent). -

LICENSING SYSTEM Prospecting and Mining to be Regulated NO PRIVATE ROYALTIES

f YFrom

I WELLINGTON, This Day. 'A more intensive search. for oil supjHies in ihe Dominion -appears to be fooreshadowed by the provisions of the Petroleum Bill, which ' was introduced in tie House of Representatives by the Gdvernor-General 's message last night. The Bill is a comprehensive measure of 47 clauses which covers exhaustively *31 Uspects of oil prospecting and mining. Probably the most important provision. is that vesting in the Crown the ' ownership ojf all petroleum existing in its natural condition on or below the •urfaoe of any land in New Zealand. It 5s also laid down that prospecting and mining for petroleum can only be carried on pursuant to licences granted under the new Iegislation by the Minister of Hines, although existing rights may remain in"for&e for a period of 12 anonths. Prospecting licences will not apply in any individual case to an area. greater than 200 square miles, and the term of each licence will be for five years. The Minister may impose conditions in the granting of a prospecting licencfi and the licensee will be _ required to interfere as little as possible T^ith the occupation and uSe of land by other persons who have. a right to use or-occupy it. A deposit of £1000 will be required from each holder of a prospecting licence as- security for complianee with the terms and conditions ofjjfhis licenee. An annual fee of 5/- for each square mlle in the area * covered by the prospecting licence will also be required by the Government, and this sum will be payable by the licensee half-yearly in advance. . Eoyalty to State. The Bill also makes provision for the payment of a royalty to the State in the event of mining operations proving successfaL. The ^ royalty is to be at a rate of not less'than 5 per cent. of the sellihg value of crude petroleum, casing head spirit and natural gas produced and the actual rate of the royalty is to be fixed by ihe Minister when tho licence is granted. The sellihg Vaiue is to be agreed upon by the Minister and - the licensee or, failing agreement, is to be determined by arbitration. Another important provision requirm all the petroleum produced to be refined and sold in the Dominion until. the requirements of the internal mariet have been met. If at any time there is an exportable surplus the requirements in this direction may bo reiased by the issue of regulations. Tn the event of war Or at other timen when such a courae may . be necessary in the public interest, the Government Ig to be empowered to seize petroleum, products of petroleum and works associated with the industry. The Minister is also to be authorised to carry on uiinirig operations for petrolum c-r to deal in petroleum if the necessifcy arises. In cases,where native land is affect®d by any licence, and a request ismade for action by the licensee or by the native owners and occupiers, the Maori Land Board of the district is to "be' .empowered to act in all respeets on behalf of the natives concerned. Ereventlon of Waste. Anothef clause in the Bill is designed to prevent wasteful and unecononnc drilling by rival concerns operating on adjoining or adjacent areas. In such eases the licensees will be required to submlt to the Minister for fcis approval a joint seheme of development and if they fail to do so the Minister" him-^ self -will be empowered to. prepare a jscheme. It is stipulated that the deciSlonsof the Minister in all matters affected by the Iegislation will not be subject t£>- * appeal and will not be liable to pfo-} ceedings in any court except on the gronnd of lack- of jurisdiction. The information that the measure was based entirely on the English Act dealing with* the industry was given by ihe Minister' of Mines, the Hon. P. G. Webb, when introducing the Bill. The Minister said he proposed to send the Bill.to the Goldfields and Mines Committee to allow an investigation of its provisions and the taking of evidence from interested parties. The Bt. Hon. J. G. Coates (Opposition. Kapara) asked whether the Bill made provision for compensation on the same lines as the Knglish Act, and whether all oil wells now producing in the Dominion were involved. "Interests Will Be Considered." The Minister: All oil is involved. Mr. Coates : All oil? The Minister: Yes. But those interests you speak of will be considered. Mr. Coates : Then the Minister, 1 take it, has an open mind? The Minister : Yes. Mr. Co.ates raised the issue of the effeet of the Bill might have on existing freeholds. lt'Seemed that in the acquisition of the rights provided for in the Bill, he said, such action must have an eifect on all freehold rights in the Dominion. *" "All property is well protected," replied the Minister. Mr. Coates: 'Yies, but unlessit is known -what the basis of compensation is to be for trespass and damage done, ft ooxtid quite easiiy .prejudice the freehold rights of any standing relat-, ing to that property. "Does the Bill provide for the c^ncelling of all oil rigbts and agreements now in existence?" asked Mr. B. G. Smith (Opposition, New Plymoutb). * The jfinister: The Bill provides for the granting of licences over thoee areas. Mr. Smith: And over-rideB any pgreements? i |ir. AVebb; Provision is made for 9 -*

taking complete possession of oil rights ; and ample compensation is provided i'or. Heplying tb a 'question by Mr.' W. P. Endean (Opposition, Parnell), the ftfin- ' ister said that the Bill was on all fours with the English Act a'nd provided compensation .not for oil diseovered on property, but for all surface damage do'ne. The Goverriment would endourage any company or" person with sufficient capital, knowledge and equipment to do the job, to apply for a licence. The Bill Was read a second time pro forma and referred to the Goldfields ] atd Mineg Co.mmittee. ,