The Press WEDNESDAY, JULY 4, 1962. Kapuni Development

Press, Volume CI, Issue 29865, 4 July 1962, Page 12

The Press WEDNESDAY, JULY 4, 1962. Kapuni Development

The fact that Mr Shand. Minister of Labour and

Mines, on his visit to Europe for the International Labour Organisation conference, made inquiries about natural gas led to the supposition that the Government intended him to be its representative in the development of New Zealand’s oil wells. Consequently, it was perplexing when the Prime Minister announced (only a few days before Mr Shand’s return) that a committee of departmental officers had been set up under the direction of the Minister of Industries and Commerce, Mr Marshall, to prepare for the early development of New Zealand’s natural gas resources. The naming of Mr Marshall—a Minister who already - has quite enough to do—was not the only puzzling thing about the Prime Minister’s statement What did he mean when he said, in referring to the public servants’ committee, that “ many “ important policy decisions “ will be involved in the “ ownership, management? “ production and regulation “ of gas and oil wells . . . ”? As Mr Holyoake has since explained, the ownership of the wells and their products is not open to any question. By statute the organisation that drilled the wells under licence granted by the Government has proprietary rights to the products. As licensee it will pay a royalty to the Government, at a rate specified in the licence, for crude petroleum won and natural gas sold. The management and production of the wells are the concern of the licensee, subject to the powers of the Government to ensure compliance with the terms of licences. What “ important “ policy decisions ” that concern a committee of l

officials are involved, therefore, in the “ ownership, “ management, production “ and regulation ” of the wells?

It is satisfactory to have the Prime Minister’s assurance that the Government “is determined that “natural gas from Kapuni “or elsewhere should be “ put to work with the least “ possible delay ”, It is true that “some complex prob- “ lems have to be settled “ before this can be “ accomplished ”, but surely those who have invested heavily in the oil search have the greatest incentive and the special knowledge to find the solutions? They have spent some £6 million already, and will probably have to spend many more millions (for additional w’ells and for pipelines to distribute gas and carry condensate) before they can expect a return on their investment. New Zealand’s good fortune in having companies prospecting without cost to the country is not sufficiently appreciated. This year the Australian Government is paying subsidies to companies for oil exploration amounting to £2.7 million, as well as allowing about £1 million a year in tax concessions. The New Zealand Government’s duty is to give all reasonable help to the prospecting companies to realise a potential that may richly endow New Zealand. The two major oil companies in the prospecting group have technical, scientific and managerial resources of quality and experience far beyond those of any committee of New Zealand public servants. The present Government should be particularly happy to leave development in the companies’ hands, for the National Party’s basic philosophy is belief in private enterprise.