Ninety Per Cent. Luck

Sun (Auckland), Volume II, Issue 595, 22 February 1929, Page 8

Ninety Per Cent. Luck

Dominion’s Chances for Crude Oil OX tlie word of an American oil magnate now in Xew Zealand, boring for oil is 90 per cent, luck and 10 per cent, geology. For this reason, he says, large sums of mone\ must be spent if the petroliferous potentialities of thF country are to be exploited. Holes must be bored all over the country in order to secure a steady flow from the crude oil which 'is known to exist beneath the surface. If this supply is tapped, he predicts, petrol will sell at Is 4d a gallon.

j 'JpHE machinery of the Legislature has been slow to move toward making possible the full working of petroliferous lands in New Zealand, and even now there is nothing on the Statute which affords more than modest inducement to the prospector. Intricate legislation which was introduced to Parliament two years ago

was conveniently shelved because of its many thorns, and now lies dusty on the shelves. But if New Zealand has forgotten its petrol resources, America is watching. Mr. J. E. Gray, managing direc-

tor of the Atlantic Union Oil Company, America, visited Auckland this week. Naturally he was interested in the activities of the bores along the Taranaki coast, and followed closely the reports of their varying successes. The news that gushing had stopped at the Blenheim bore at New Plymouth does not dismay Mr. Gray in his hope that New Zealand eventually might produce its own crude oil, for, as he pointed out, almost the whole of the petrol produced in the United States is brought from passive wells through suction pumps. A gusher lasts only for the first day or two, and then the well, if it contains a reasonable supply, settles to a steady flow. Oil prospecting, Mr. Gray reminds New Zealanders, is 90 per cent, luck and 10 per cent, geology, and prospectors here might have to bore all over the country before they secure the correct spot where the supply is located. “In certain parts of America,” he said, “we have found the oil over 100 miles from the spot where we flrat discerned the gas. We might have to sink hundreds of wells before

we strike it. Amt then it has to be taken out in pumps. In Queensland 50 or 60 small companies have taken up boring, and are poking holes all over the country.

“In this game you hear only of those who win. You hear nothing of the failures, and the unsuccessful bores that have to be driven are never mentioned.

“It has been proven that there Is oil in this Dominion. I have tested the samples, and find them good. But these resources cannot b,e developed unless those concerned have the ability to spend large sums—and if necessary lose large sums —in the process.” AMERICA’S OFFER Mr. Gray sought to destroy any illusion that his firm did not wish to see New Zealand producing her own oil. “We want to see it and are prepared to encourage it,” he added. “If there is reasonable assurance of a steady supply, my company could, In 60 days, erect for a cost of £300,000 a refinery plant capable of turning out 4,000 barrels daily—sufficient for the requirements of the whole country. “We do not want the land from which the oil is recovered, but w,e would he prepared to buy the crude oil as it is produced and refine it under the best conditions. This process, although encouraged from the States, would actually be a New Zealand industry, and in addition to the employment of many hundreds of men in refinery and distribution, the concern would he able to reduce the price of petrol to something in the vicinity of Is 4d a gallon retail. At the present time, however, there is not a supply of sufficient volume to warrant the erection of a big refinery.” GAS AT 1s 4d a GALLON

In discussing the possibility of American concerns developing the petrol industry within New Zealand, Mr. Gray ventured the view that it was to the advantage of the Dominion if capital from anywhere in the world were invested in oil production here. “New Zealand wants the oil,” he said, “and it does not matter if it is produced by a Chinaman, so long as it benefits this country and satisfies its requirements. The great bulk of the money involved would be spent witbin the Dominion. In America we have a free-for-all system, and incidentally British enterprise is largely represented on the fields. “We would rather get our crude oil from you and refine it here. It would save a great deal of money to us, and also to yon people, because it would obviate the necessity for us transporting it half-way round the world, and consequently reduce the retail price through the overhead costs.” Mr. Gray has shown that the next move is in the hands of New Zealand, and that if this move is taken, America is prepared to develop the untapped oil resources. Parliament soon must revive the discarded petroleum legislation if prospecting is to progress. Its problems are so acute, however, and their regulation fraught by so many intricate difficulties that the new Government probably will evade tackling it until some of the country’s more pressing needs have been satisfied.