OIL BORING RIGHTS.

Gisborne Times, Volume LXVI, Issue 10412, 20 October 1927, Page 2

OIL BORING RIGHTS.

GOVERNMENT’S NEW PROPOSALS.

LICENSES MUST BE OBTAINED

(Special to the Times.) WELLINGTON, Oct. IS. The long-looked fox’ legislation lor the encouragement of tlio production of petroleum from Crown and other lands in Now Zealand was introduced into the House last night.* “A Bill based on the experience of the oil fields of the world,” was the description applied to the measure by the. Minister of Mines (Hon. G. J. Anderson). .ft is proposed by the Bill to effect this help by issuing warrants to prospect for, and licenses to win. petroleum by prescribing conditions for idle payment by licenses of royalties on petroleum won under the license, by training other ttonus and conditions subject to which tlie warrants and licenses will be issued and, generally. bv making provision for the regulation of mining operations in respect of petroleum, if passed the Act • will become operative on January 1 next. The existing petroleum warrants and licenses are excepted for twelve months. Prospecting for, and the winning of, petroleum will, alter January 1 next, not be lawful, unless carried out in pursuance ol a prospecting warrant or n l.i/rsc granted under the. new regulation - a prohibition which is to apply equally to the owner of any land. Power is given tlie Governor-General to declare by proclamation Crown. Native, private or other lands to be open for petroleum prospecting or winning operations unclothe noiico will not be affected by. the existence of any lease, license, mortgage, reservation or other restriction on Ibe property. Before the proclamation can issue, however, certain requirements' have to be met. in the- first place, the Minister of Mines .is to give four weeks' public notice of his intention to recommend that course to the C-ijovei nor-General. O’jjecti ns <.an 'be made by land owners and, at the discretion of tlie .Minister, these may be referred to a magistrate, whose report on all of them must be made before the recommendation is conveyed to the Gower K.r-.Gom-.i al. After consideration of the magistrate’s report and recommendation. the Minister may determine whetl er or not the objections should be upheld and may recommend the issue of the .proclamation in relation to the whole of the area or any defined poiiion. Power is also given the Minister to authorise geological surveys to he made of any lands with a view to dodo mining whether they are <ii--1 bearing or not. The issue of {-respecting warrants is at the absolute discretion of tlie Minister. '.’’he warrants are to bo granted onlv for lands declared open for operations. By the proclamation referred to, they will invest the holder with the exclusive right to prospect for petroleum in the area, but the operations are to be carried out so as to interfere as little as possible with the occupation and use of the land. In some cases, it will lie necessary for the warrant-holder to obtain consent of entry from the owner of the land. This will apply where land is actually used as a garden, orchard, vineyard, nursery, plantation, oi’ ornamental pleasure ground, to i areas a quarter of an acre and under in boroughs or town districts and to land the site of which is situated wit-Jiin 100 feet of any factory. house, hospital, church, public building, cemetery or waterworks. Applicants for warrants will he required to deposit with the Minister 1 a sum not exceeding a maximum amount to be fixed .by regulation or an approved bond for a like? sum. The amount of any deposit made or recovered under any bond is to lie* applied by the Minister"’ towards the restoration or protection of any bor- . mgs. wells, oils or other property ini'juviously alfected or > endangered by the failure of the warrant or license—holder to comply with the requirements. Under ordinary circumstances. th<> licensee will receive interest on his deposit, which is to he paid into the common fund of f he Public Trust Office and, at the termination of the license or warrant, lie will lie entitled to a r6fund. of the deposit. Further clauses render it incumbent for the holder of a warrant to carry on prospecting operations. "Within three months, or such other time as the Minister may allow, lie must proceed to install his outfit and equipment and commence drilling at least one well and prosecute his operations with reasonable diligence, to production or to a point where tho well is proved unsuccessful to the satisfaction of the .Minister. This procedure is to • he continued until a. number of wells equal to the number of one hundred acre blocks comprised in /the warrant are dpi (led, unless for sufficient reason the Minister consents to a fewer number. Wells previously, drilled to. the extent indicated are to be taken into account in computing the tally. In selecting a site, a. prospector lias to take ‘bare that his drilling; does .not intentionally interfere with the source of supplv to wells on an adjoining property that have been drilled to production and without tdie previous written consent of the Minister. Holders of prospecting warrants and licenses' arc; Uebdrred from plugging any well which has been brought to tlie point of production while payable petroleum is being or can. be obtained. Provision is included to enable holders of prospecting warrants to obtain Ir onses to win petroleum over the whole or portion of tlie area he is prospect ihg. Separate provisions are made for the issue by ,tho Minister to. cither than warrant holders of licenses to win petroleum, hut. they will not applv to land l the subject of a, prospecting warrant, unless tlio written consent o+‘ the warrant holder is given.; v Holders of licences will l ie required to comply with the same conditions* as <tp sepimbv as are provided for the warrant holders. During its currency the license will give the holdler exclusive rights to win petroleum within the area and such right of possession and occupation as may be necessary subject to the 'charges to be prescribed by regulation. Holders of licenses or warrants will hold water rights in the areas. Geological records, it is /further provided, must tie kept Except with the consent of the Minister, it will not he lawful to assign, transfer or sublet warrants for licenses. Other conditions attached to the warrant or license are the granting bv the Minister of right-of-ways and the requirement that license holders of pipe lines convey at reasonable rates petroleum belonging:' to other 'licensees. Power is given the Minister to call upon holders or licensees to show .cause before a Warden or a Magistrate why a license or warrant should not be cancelled. The reebmmendation will bo considered by. the. :Minister, whose decision will be final.

Provisions are incorporated in relation to buildings machinery and other structural or n on-structural improvements made on a property by a licensee. Ho, has no right to compensation but he may, before the determination of his license, or within a" prescribed time thereafter, remove or otherwise dispose of all structural improvements. This section is to apply also to prospecting warrant holders. Within twelve months of the commencement of the -Act, existing warrants and licenses which are to continue in force for that period may be surrendered and exchanged for new authorities. Within the same period notice has to be given to the Ministei of claims of existing rights with respect to petroleum created otherwise than by grant of warrant or license. Before dealing with, an application lor warrant or license, the' Minister may require the applicant to supply intormatio’n as. to the geological formation of the land and. persons desirous of making a preliminary investigation will have the same rights of entry as though ,they were warrant holders. The Bill provides for the payment of compensation to any person having an estate or interest in any lands taken under the Act, or injuriously affected by the operation of the Act, or who suffers any damage through the exercise of any prospecting warrant or license. The compensation is to be settled between the parties and, in default of agreement, under the provisions of the Public Works Act. It is proposed that a royalty of 10 per cent, on the selling value at the well-mouth shall be paid halfyearly to the Mines Department, which, after deducting not more than 10 per cent, of the amount paid in, shall pay the balance in to the appro-, priate accounts if the land is Crown or endowment lands, or to the native trustee if the land belongs to Maoris and to the persons interested if the land is freehold. Licensees will be required to furnish monthly ■' statements of dil won and their books will be open to inspection by persons authorised by the Minister of Mines An important clquse in the Bill provides that the Imperial Government or the New Zealand Government may. after due notice, have the first right to purchase, at current rates, the whole or portion of the out put from any well. This right is to over-ride any contract into which the licensee may have entered. In time of emergency, or of war, notice need not be given. The Government also seeks to retain the right, in time of emergency or of war. to take over the working of a licensee's plant, subject to the payment of the value of the output: less working' and management costs. It is suggested that at least seven days’ notice shall be given to the owner or occupier o* any” land of the intention of the holder of a prospecting warrant oi license and his men and plant to enter on the area specified to prospect for oil. In the case of Native bind, the notice shall be 28 . days, a copy of the notice to be_ adv-u-t: eu I in the Gazette and the Kahiti. The Bill proposes that, for tue purpose of carrying on any mining operations under its terms, the GovernorGeneral may, at the request of and at the expense of the licensee, take any land under the Public Works Act and vest it in the licensee. Among other miscellaneous proviI sions it is suggested that no person shall have anything to do with the j administration of" the proposed Act j while he .or his wile or uuy liiembei c*i * his family has any pecuniary interest in any prospecting warrant oi license. “It has been very difficult in ti'.e past,” said the Minister of Mutes, in explaining the provisions of -lie Bill, “for mining companies . piqspectin." for oil to secure rights etet land, and the Bill sets out the moans hv which this work can be none eas.'-v tiircugli .the Mines Department. ' The Leader of the Opposition 'Mi-. H. E. Holland): Does it provide tor subsidies ? .... The Minister: The genert! r.umnsr law provides for that. M r . Holland: Yes. I know. _ , } “That is not' part of tins rnll, continued the Minister'. ‘‘The measure defines the amount of the royalty to be paid to the owners or land f t safeguards the interests _of *ue property owners, win, are given an opportunity to object or otherwise. The Bill is really based upon the experience of the oil fields of the world. I hope it will, have that errect. Mr. Holland: Is it intended to subsidise? . Tfio Minister: “There is no provision in the Bill in that connection. Under the mining laws of New Zealand certain forms have to be gone through, in every case where subsidies are required and that procedure would have to. fio complied with There is no specific provision in the Bill.” . Mr. T. AY. Rhodes (l hames): Does it cover other than Crown lauds. The Minister: Yes, .it covers all lands. _