PETROLEUM BILL.

Auckland Star, Volume LVIII, Issue 246, 18 October 1927, Page 5

PETROLEUM BILL.

TO ENCOURAGE PRODUCTION.

HO SUBSIDIES PROVIDED.

"EACH CASE ON ITS MERIT."

(By Telegraph.—Parliamentary Reporter.)

WELLINGTON, Monday.

The Petroleum Bill, a measure to encourage the production of petroleum from Crown and other lands was introduced in the House to-night by Governor's Message. It makes provision for the issue of warrants to prospect for and licenses _to win petroleum, prescribes conditions for the payment by licensees of royalties, and provides for the regulation of mining operations in respect of petroleum.

The Minister of Mines (Hon G. J. Anderson), briefly explaining the bill, said that in the past it had been very difficult in some circumstances for companies seeking petroleum to get the proper right to prospect, especially where native lands and endowments were concerned.

Mr. Holland (Leader of the Opposi tion): Does it provide for subsidies.

Mr. Anderson: The general mining laws provide for subsidies. That is not part of this bill. The bill safeguards the interests of property owners by giving opportunities for prospecting. It has been drafted on the experience of the oil fields of the world.

Mr. Holland: Is it intended to subsi dise.

Mr. Anderson: That is not intended under this bill.

Mr. Holland said he wanted to know from the Minister whether, in the event of applications for assistance, the Government would be prepared to give favourable consideration.

Mr. Anderson: Each case will be treated on its merits.

The bill makes it unlawful for prospecting or mining operations for petroleum to be carried out, except in pursuance of a prospecting warrant or license. The Governor-General may proclaim lands open for operations, and the Minister is empowered to order geological surveys. The holder of a prospecting warrant must, within three months after issue, install a standard drill, or other equipment, and commence drilling at least one well, and continue to a production point or till the we: is proved unsuccessful, and, thereafter, must continue till he has drilled a number of wells equal to the number of 100 acre blocks, comprised in the warrant, unless the Minister orders otherwise. A license will give exclusive rights to win petroleum within the area named. Licenses or warrants may not be assigned except with the Minister's consent. The Minister is entitled to cancel a license or warrant in cases of noncompliance with the terms of the Act. Persons injuriously affected by the operations of the Act will be entitled to compensation from the person on whose behalf the lands were taken, or from the licensee. Licensees will pay royalties equal to 10 per cent of the value of the crude petroleum won.

The bill also provides for numerous contingencies and for the making c regulations by Order-in-Council.