Oil men offer P.M. hard-headed advice

Press, 5 March 1984, Page 8

Oil men offer P.M. hard-headed advice

NZPA staff correspondent

San Antonio In a quickfire briefing session in Austin, Texas, on Friday, a number of leaders in oil and gas exploration and research gave the Prime Minister, Sir Robert Muldoon, hard-headed advice on how to attract exploration companies to New Zealand, and how to keep them there.

Mr George Mitchell, an independent producer who has drilled thousands of wells, predicted that oil prices would remain steady for the next two years, then rise about 6 per cent a year, or the rate of inflation.

The oil industry in the United States had had a lean two years or so, he said, and so contractors’ prices were down. That meant that if New Zealand wanted to do

exploratory seismological work it should do it now, and pay half the normal price.

New Zealand should also encourage independents to compete, he said, but it should avoid the mistake that other countries, even, Canada and Britain, had made, of being too greedy, and altering the rules to take a big government share once a big field had been found.

Sir Robert was also told that because drilling is still an inexact art, depending on instinct and judgment as much as technology, nine companies might drill dry wells in one small area, with a tenth striking oil

This was an expensive business, he was told, and the exploration companies would be attracted only if the prospect was there to

reap huge profits in the event of a big strike.

All sorts of deals were possible now, Sir Robert was told: a seismological company, for example, would work with the New Zealand Government, do its own work at no cost to New Zealand and sell its data to exploratory companies. It was also suggested that New Zealand hire a “world renowned” figure to head its energy programme so as to attract the confidence of big companies. ,Sir Robert also, had an “exchange of views” in Austin with a state senator, Mr Bill Simms, who is also executive secretary of the Texas Sheep and Goat Raisers’ Association, a sheepfarmer himself and an avowed enemy of New Zealand lamb exports to the United States.

Sir Robert suggested that the answer to low lamb sales in the United States was for New Zealand and American producers to do more promotion here. Senator Simms, who sponsored an attempt in 1981 to have a countervailing duty put on New Zealand lamb, praised the work of the New Zealand lamb company in joining with American and Australian producers to promote lamb in the United States, but said that what would hurt American producers most would be ex-

ports of chilled (rather than frozen) New Zealand lamb to the United States. He suggested an exchange whereby New Zealand could take some of the coyotes which preyed on sheep in Texas, and which fanners were unable to counter because of environmental laws which prevented wide-scale poisoning. Sir Robert also talked to other groups, and visited a museum in Frederick, in the Texas hill country where, President Lyndon Johnson grew up, which is dedicated to Fleet Admiral Chester Nimitz, the United States naval commander in the Pacific in World War IL There he got a whiff of home: Kimberley Gates, aged 17, of Motueka, is at the high school there on a Rotary scholarship. She has been in Frederick for six weeks, staying with an American family, and will be there until January. Sir Robert went by road from Austin to San Antonio, where he was to spend the week-end.