THE WORLD’S OIL

Hokitika Guardian, 20 July 1931, Page 7

THE WORLD’S OIL

SHORTAGE UNLIKELY.

VAST FIELDS NOT YET TAPPED. In the United States no thought was at present being given to any possibility ofc the oilfields petering out, but ratner the question was one of how to absorb the enormous quantities of oil that were, being produced, said Mr F. M. Neall, of the Atlantic Refining Com pany of Philadelphia, who was an arrival in Wellington from Sydney by the Maunganui. Mr Ncall's inteests are in marketing, and he has spent several months in Australia in launching new campaigns on behalf of his company. During the past few years he has travelled extensively in Europe, and twelve months ago was in South Africa studying conditions there. He will remain in New Zealand for a fortnight, during which time he will be mostly sightseeing and will join the Aorangi at Auckland on July 28 en route for the United States. The oil interests in America, said Mr Neal to a “Dominion” representative, sought to remedy the flooding of the oil market by a method of controlling the output of the wells under a system called “pro-rationing,” each field being allowed to produce only a stipulated amount a year. The same thing was to be seen in the South African diamond fields, where the output was definitely restricted to a certain Ague.

DANCED OF “PRICE-WARS,”

If oil-pi eduction in the United States were no restricted in any way the market would be glutted with od at very lew prices, wiiich would then be followed by “price-wars’’ and in the ensuring struggle the whoel Industy would be completely disorganised and many companies would go under At present there was quite a serious “price-war,” in progress on the Pacific Coast, and at least two of the largest firms were in the hands of the receiv-

Although industry was generally depressed in the United States, and when lie left there did not appear to be any visible signs of recovery', Mr Neal: said that the consumption of petrol had maintained the same level as the previous year. That was a remarkable thing. In the automobile industry the factories were only working up to 40 per cent of their normal capacity, which was pohably accounted for by the fact that people were not buying new motor-cars, but were retaining and “making do” last year’s model.

FUTURE SUPPLIES

That, there was no fear of the oilfields petering out, Air Neall was quite sure, ’raking one of the richest helds in the States, for instance, in the Oklahoma city pool, I50;0U0 barrels a day were being extracted, but if the fielu was working a its fullest capacity the amount would be 5,000,000 barrels a day, A barrel, he explained was equal to forty-two wine gallons, and the total production in the whole of the United States a day was 2,100,000 barrels. For many hundreds of years the world could be assured of an ample supply of oil, he continued. Should America fail, and that was extremely unlikely, they could turn to the immensely rich deposits in Irak, Mesopotamia. The League of Nations had allocated 25 per cent of the oilfields there each to Great Britain, United States, France and to the original landowners. The oil was exceedingly prolific, and it was only a question of laying down sitable pipe lines fo develop the industry. They were enormous potential fields for the future. Again, there were wonderfully rich oil deposits at Baku, on the borders of the Caspion Sea, and p : pe~lines had aleady been laid to the Block Sea. “When the whole world gets down to sound business principles, and re T alises in full the deleterious effects of over-production, then will we get something like economic equilibrium,” he said. ‘‘Take the coffe crop, for instance. Two years’ supply it at present being held in Brazil, and wheat—the 1928 crop has only just been sold.

NO I: i 'All FROM TRUSTS. “.The . tendency to amalgamate and form trusts has from time to time been deprecated, but I see nothing to be feared from the trust movement. One of the biggest amalgamations in recent years was that of the Standard and Vacuum Oil companies in New York. A trust makes for increased efficiency and stimulates, aiul_ also, more important still, regulates production. “How does America generally gnrd Australia and New Zealand as a market for her •goods?” Mr Neall was asked. “American manufacturers regard every market in the world as a potential possibility,’ be replied. “In New Zealand, for instance, much American capital has been sunk particularly in the automobile and oil industries, and that surely bears a striking witness to the confidence Americans have in your country.” While in Australia, Mr Neall had the opportunity of locking into econom'o conditions fairly thoroughly, and in common with many of the quite impartial observers, he saw a change of government'as the first step to regain hei lost prosperity. And also if production could .be stimulated, that would help a lot, but Australian workers •vnud have to be paid wages comparpuv with those paid in other countries.