SEARCH FOR OIL

New Zealand Herald, Volume LXXIII, Issue 22413, 8 May 1936, Page 19

SEARCH FOR OIL

AUSTBALIAN PLANS FEDERAL LOAN OF £250,000 THE NEWNES SHALE FIELD [from our own correspondent] SYDNEY, May 2 The oil-s'earchers of Australia are divided into three camps—those who maintain that there should be development of shale oil resources; those who insist that prospecting for flow oil should be continue! more intensively; and those who support the hydrogenation from coal process. It was after a thorough review of all sources of production and of technical reports on flow oil, shale oil, and oil from coal, that the Commonwealth Government decided this week to make available £250,000 to assist the search for flow oil.

The money will be lent to approved companies or persons on a £1 for £1 basis for drilling in the search for flow oil. The money will not be available for preliminary geological surveys. While it is recognised that such surveys are a pre-requisite for drilling, it is felt that a good deal of this work has already been done, and that the immediate need is to drill favourable areas. The Government has also decided to invite offers for tho development of the Newnes shale field. To establish the industry, it will be necessary to exempt the products of the industry from excise duty for a ix>riod of years. The Government has' fixed this period at 20 years and petrol production from shale in Australia up to a maximum of 10,000,000 gallons will be protected from overseas competition for that period to the amount of the excise duty at 5Jd a gallon. Newnes is capable of producing 7,250,000 gallons a year and could at short notice produce at least the nucleus of Australia's basic requirements of oil and petrol for the defence services. Offers will be publicly invited for the operation of the Newnes undertaking. The Commonwealth Government at present holds the option over plant and machinery, which originally cost nearly £700,000 and which can now be secured for £34,500. A company taking up the project is .officially estimated to require £600,000 capital. Tho exemption from payment from excise duty will make considerable inroads into revenue, but the Government is impelled to place defence requirements before to all other considerations.

Sir David Rivett, ohairman of the Commonwealth Hydrogenation Committee, is to go abroad to study the production of oil from'coal.