Oil in New Zealand

Manawatu Times, Volume 64, Issue 97, 27 April 1939, Page 4

Oil in New Zealand

FOUND IN MORE UNLIKELY PLACES AMERICAN GEOLOGIST’S OPINION References to the attempt to find oil in payable quantities in New Zealand was made in an address before members of the Palmerston North Rotary Club on Monday by Mr. R. E. Turner, of California, U.S.A., who is a geologist engaged in an oil survey of the Dominion. Twenty-five years ago, said Mr. Turner, they thought they had just about exhausted the production of oil, but they had not even started to find a great amount in California, apart from other fields in Texas, Oklahoma and Russia. It was necessary for the oilproducing companies to maintain reserves, and that was one of the reasons for the interest three companies were taking in New Zealand. The world was using more than two million barrels of oil a year, of which U.S.A. produced 60 per cent, and Russia 12 per cent. Germany and Japan produced only about a quarter of one per cent, and Italy considerably less. There were 303 official by-products from oil, which included a great variety of substances. In U.S.A. 35 per cent, of the mechanical energy was furnished by oil. Prospecting Favoured The Labour Government legislation had favoured inviting foreign oil companies to New Zealand. It made it easy to acquire land, which was a difficulty in U.S.A., where it was very common to give the owner of the land a rental or bonus as well as a royalty. A man with suitably situated land could expect as much as £6 per acre as a yearly rental. Tho New Zealand permit gave tho right of exploitation for five years. A deposit of £IOOO and an annual rental of a nominal amount had to bo paid to the Government. All oil rights belonged to tho Crown and there was the very low rate of royalty of five per cent. Tho Minister of Mines, however, could raifee the royalty when the company applied for a further permit. A number of attempts to find oil in New Zealand had been unsuccessful. A well-financed company with the best technical staff could succeed in locating oil in one try out of 18. The other 17 wells would be dry. Mere shots in the dark would increase the ratio to about one in 75 or one in 80.

The Government had prohibited the export of oil from New Zealand, but it was a foregone conclusion that oil would be exported, otherwise there would be no future for the producing company. The oil consumption in New Zealand was not very high, being about two barrels per capita, as compared with the Californian consumption of eight barrels per capita per year, although the number of cars per capita was the same. Probably the reasons for this were that petrol cost 50 cents per gallon in New Zealand and only 18 cents in U*S.A., and many New Zealanders used light cars with low petrol consumption. Finding Oil Mr. Turner explained the methods of locating oil. Ono of the less expensive methods was the geological mapping of the area, as oil existed only in sedentary rocks folded in a suitable manner to trap and hold it. Land forms—such as streams and ridges—were of value by telling the recent history of the area. The geophysical methods involved the use of instruments in areas where rocks did not outcrop and alluvial material several hundreds of feet thick, such as built by the Manawatu and Rangitikei Rivers, obscured the outcrop. Slight variations in the strength of the earth’s magnetic field betrayed the geological structures. Another method involved the refraction of earthquake waves and their reflections from the horizons within the earth’s crust. The explosion of dynamite 200 feet below the surface would set up earthquake waves in all directions. Some went downwards and upon encountering rock of a different character were reflected to the surface, making it possible to map the way in which the rock tilted, down to the depth of 35,000 feet below the surface. All these methods would be employed in New Zealand. Drilling The first commercial well was drilled to a depth of 69J feet, and one of the biggest oil fields in the world was discovered by digging a water well. The Texas oil field was discovered in 1930 and so much oil was sold by 1932 that the value dropped from a dollar a barrel to 10 cents. They had to close some wells, of which there w r ere 30,000 in an area 30 miles long and 15 miles at its widest point. Several thousand wells had a potential production of 20,000 barrels a day. Air. Turner instanced cases of bad drilling and of too many wells in a small area. This, ho said, would not happen in New Zealand.

New Zealand’s Chances Commenting on the chances of finding oil in New Zealand, Air. Turner said oil had been found in much more unlikely places. It would probably be known in the next five years whether the prospecting companies would be able to arrive at an answer.

Mr. J. C. Young proposed a vote of thanks to tho speaker.