TARANAKI PETROLEUM COMPANY.

Stratford Evening Post, Volume XXIX, Issue 78, 22 May 1911, Page 5

TARANAKI PETROLEUM COMPANY.

INTEIt:; '.Ta purchased. The Taranaki Petioleum Company on Saturday 'received cable advice from Air. ,). D. llenvy, the oilfield expert, who recently visited Taranaki a* the representative of English capitalists, to the effect that it had been decided to accept the terms offered by the company for the sale of its properties, plant, and interests to a London syndicate. The news was received with many expressions of pleasure- by shareholders and non-sharcholdcrs alike, the satisfaction being not so much that the concern had been sold as that it. had been found possible to persuade considerable outside capital to assist in the development of a primary product, whose existence had long been located but whose existence in payable quantities had been demonstrated comparatively recently as the result of the dogged determination ol the local company and its expert staff, Not unnaturally there was much enquiry as to the terms of the transaction and discussion as to the position of the present shareholders: as to whether it was a straight-out sale for cash, or whether the shareholders would he able to retain an interest. A satisfactory feature was that in every case that came under our notice the shareholders desired the latter course, which is generally believed to he the case. It is not possible, however, to make any announcement yet,but we have the assurance of the directors that the interests of the shareholders have been well conserved, whilst still making the venture an attractive one for the investment of capital. The directors will doubtless make public the facts in this matter when the proper time arrives, which will be, doubtless, when they are authorised to do so by the purchasers. Meanwhile, the terms arc pot disclosed. THE NEGOTIATIONS. Messrs -Watkins and Fox, of New Plymouth, have for sonic few years been in direct communication with many of tlie largest “oil men” and financiers in London, through their London agents, Messrs Rodyk, Williamson and Fox, who in the first place induced Mr. G. Adams, through his friend Sir Bovcrton Redwood, to visit the oilfields of Taranaki a few years ago. This, we may say, was tlie commencement of London capitalists taking an interest in Taranaki oil. At that time, some four years since, money was hard to obtain, owing to tlie financial crisis in America, which prevented capitalists then from taking hold of tlie industry here. Since that time, Messrs Watkins and Fox have been in constant communication with the right people in the Old Land, and have pointed out’tlie many advantages of securing an interest in tliis district. They have been kept well posted as to every development on the local field, not only by letters sent in answer to direct queries from Home, hut also by means of articles appearing in the petroleum and financial journals dealing with the possibilities of the industry. the exceptionally fortunate .situation of tlie oilfield as regards tlie port, and the commanding situation of the port itself, whilst they have also been aware of the progressive policy of New Plymouth in regard to tlie development of the port for ocean-going traffic. As just stated, these oil men asked for and were regularly supplied with information concerning the field, and expressed themselves as so satisfied with tlie nature of that supplied that they stated when time was opportune they would he prepared to consider Taranaki as a field for their enterprise. One and all of them expressed a strong opinion as to tiro many advantages of placing their .money in British possessions, where a security was guaranteed which would not he obtainable on foreign oilfields. It was towards the end of 1909 that Air. Watkins got into communication with Mr. J. D. Henry, and that gentleman wrote that he was so impressed hv the nature of the information sent Home that he intended to visit Taranaki during (lie following year, adding: “New Zealand will come well to tiro front before the autumn. It is impossible not. to attach real importance to your oilfields, when one reads the geological reports of Dr. J. M. Bell.” Following on this, tiro matter of acquiring the Taranaki Petroleum Company by Air. Henry’s group of men was suggested to these capitalists by Messrs Watkins and Fox last May. and Hie shareholders in the company have much to thank the firm for in tiro “deal” which has just taken place. They must also thank the Government, and especially tiro Minister for Mines, for the action they took in having the first geological survey made of our oilfields. Tiro Irondon financiers insisted on official data of this kind being placed before them, as well as reports from their own experts, before thev would invest capital in such undertakings, and Mr. Henry (London’s well-known expert) therefore visited ns. which visit brought about the transaction just announced. FUTURE DEVELOPMENT. Future development depends very largely, of c our si, on the amount of capital that will he at the disposal of (die new company. We are given to believe Hint the capital will be very large, and will he quite sufficient for a rapid development of the industry. The management will not lie hampered for want of funds, which lias been tiro painful experience of tiro local companies in the past, and which lias been the reason for transferring the local interests to a larger concern. A certain amount ,of “wild-catting’’ will he necessary; that is, boring in localities where as yet Hie existence of payable oil deposits is not proved, but the information gained in such bores must prove of tlie utmost importance to tiro geological export who lias (n trace Hie direction of Hie field. It can fairly he assumed that the management of the eompa. will he of the best, guided by experience in tiro marvellous petroleum development of recent years. Tiro best export knowledge available, and thoroughly modern plant—no one pretends that Hie prospecting plant hero has been of tiro most modern type will be at Hie disposal of the company, and the success of the field should he assured. There is one thing very certain. Hint th'i new people can depend on every local assistance in their future operalions. and farmers and landholders will plac" no obstacles in Hie way at tiro inception of a new and important industry. LOCAL BENEFITS. T( has been found that where petroleum developments take place they bring in their train population and industries, thereby enhancing Hie values of property throughout the field. Onlv two or throe months ago, in March of this year. Cl2(10 an aero was paid for land alongside a proved oilfield for Hie purposes of fnrHior development of the Santa "Maria Oilfields Co. This, of course, was in Hie locality of the oil “gushers” of California. but there is no gainsaying tiro fact that values in this district will he considerably enhanced as (he field is successfully exploited. Small landholder* in Armenia, dwellers formerly in wretched huts, are .now living in comparative affluence on royalties on oil. derived from

I hair lands. May Taranaki-landowners have similar good luck! THE HARBOR AND PORT OF SHIPMENT. Tiro harbor authorities are to be congratulated on their foresight in preparing for the future requirements of this district. in tiro importation of a most up-to-date dredge they have acquired tiro means of making the harbor suitable for tiro accommodation of large steamers, such as the oil-tankers of our navy, which will certainly draw liquid fuel supplies from here. There is every probability of New Plymouth being made a naval oilfield base. Information lias been brought under our notice that it is Hie intention, should the supplies of oil warrant it, of this base being erected in the near future. , The Admiralty has been watching' ‘events very closely as far as Taranaki 'is concerned. Lieutenant Sydenham, in charge of the naval coal supplies, has lately visited the district and inspected the work that is being done, and before him two commanders of bis Majesty’s i warships visited the well and. we understand, reported to tiro Admiralty most favorably. As previously announced, 25 barrels of Hie crude oil were sent Home through the New Zealand Government to the Admiralty for testing as to its value for fuelling purposes. Our Prime Minister, Sir Joseph Ward, SMiie few months ago put himself into communication with Downing-strict, in reference to obtaining supplies of oil fuel from Taranaki, and Hie naval authorities replied that in the event of a good supply being obtained here the Admiralty would take a good deal of its supplies from here. ‘U if 'i One of the many question)?' to lie brought up at the Imperial (jjonferoncro will he this very matter of oil fuel 'sup-' plies and bases throughout British .possessions. and as Sir Joseph Ward has taken great pains to he fully informed on this" subject it is probable. Qiqt; yoyy, shortly some important statement in this: connection may be made. ,( ... . ( OIL AND ITS BY-PRODUCTS! ‘ ! I As far as benefits arc concerned, we may look forward to the supply ‘of. oil fuel for our railways, navy,,and mercantile marine, who, it is foreshadowed Willi] certainty, will bo big consumers of Hie petroleum itself. The next most important item is benzine, of which there is a shortage throughout the world, and as Taranaki oil contains such a. high percentage wo may look to (his by-product as being one of Hie main sources of revenue. Then there are lubricating oils of many grades and of excellent quality, which Messrs A. F. Craig and Co., of Paisley, Scotland, who refined samples of the oil, declare to ho “exceptionally fine,” remarking also that “Hie oil is of exceptional quality, and Hie most superior we have examined.” One of the bestknown experts in Hie world stated that the Oils of New Zealand are superior to those being supplied to Australia from the fields of Burma, Sumatra and Borneo. There is, of course, a large demand for kerosene, too, in our own country, a demand which is being supplied now by the Standard Oil Company of America, and in which trade Hie Shell Transport and Trading Company is about to take a hand. Last, but certainly not least, is paraffin, a most important by-product of petroleum which at present, is an important factor in Hie manufacture of candles, ■which is an industry in itself capable of employing a large number of hands. It is stated by one authority that owing to tlie large proportion—lo.7o per cent. — of paraffin in our oils, we should he able to compete with any country in the world in the manufacture of caudles. The value of this heavy proportion of paraffin may he estimated in a measure from the fact that in some parts of Russia, where oil is with difficulty brought to Hie sea coast, oil containing only 5 per cent, of paralfin is treated for Hie extraction of that constituent and provides a lucrative investment, no value being placed on Hie residue, which is burned. There are maiij" other 1 fiscs of pv ratlin. 11. is used in Hie manufacture of wooden matches; an application of paraffin to woollen fabrics imparts an additional strength and renders them waterproof; it is used for lining beerbarrels, and is employed for glazing frescoes and paper; it is used .in starch manufacture as a. producer of Hie necessary gloss, and in laundries paralfin is largely used as an auxiliary to soap. Bara (fin is employed as a preservative of stone and wood, and it forms a protective coating for labels and stoppers of bottles used for corrosive liquids. With regard to petrol. Hie consumption of this by-product is ever increasing, owing to Hie growing list of its uses, principal among which conic oil engines of all kinds, in motor ears, for aviation purposes, and on steamers for interna] combustion engines. As bearing on 6 -this’; it is interesting to notice Hint last year Hie British Admiralty decided to build a motor battleship, an ambitious scheme formed by Mr. McKeclinie, chief engineer to Messrs Vickers, Son and Maxim, Hie vessel to bo equipped with internal combustion engines ns prime movers, and using producer gas manufactured on board from petroleum, 30,000 Jjorscpowef being generated by a set of Diesel engines giving a speed of 21 knots.

MARKETS

There is in Mow Zealand itself a splendid market for ojl and its by-products, and almost at our door is the Australian Commonwealth, which will la; a. large consumer, and which. owing to its distance from the oilfields. will doubtless find it advantageous to import from hero. There is a growing market for oil fuel, which is being found suitable for use on locomotives, steamships, smelting works, etc., and it is not unreasonable to hope that in a fpw years Xew Zealand railway murines will burn oil instead of coal, especially as ;SO great ditllculty is reported in obtaining supplies of good steam coal. One of the ablest authorities on this question has declared that witliih five years uo locomotive or steamer running where oil is produced will use any other fuel but oil. Should local production reach SOO.dOO tons per annum, it is considered practically certain that a market will be found for that amount. The estimate is based on the supposition that the railways will take dO.O(K) tons per annum, the ’Fiasco mail boats Rn.DOO tons (they are being built for oil fuel), the Australian). Navy is at present calling tenders for 00.000 tons, and the 'South Pacific licet should draw some 120,000 tons, the balance being consumed by the Union and other steamship companies and by local industries, including that of smelting Taranaki ironsaml. 1 an industry which, it is understood, will be in full before very long in Xew Plymouth. ADVAXTAHFS DF THE FIFED. The close proximity of (be oil wells, and of the oilfield generally, to 'our harbor is an undoubted advantage, making for economy by saying the necessity for the tremendous post of laying down pipe lines which on some fields absorb a vast amount, of capital. As an instance, a Cab for n inn o”Md ba= ■' pipe-line P2oo miles long. The latest line constructed, from the "Maikop, fi,elj.E thoPlaek Sea,

10 the nearest jiort is fifty milts in 1 1 11yrlJi, and cost. BXKhOUO, including (h<necessary pumping stations. la oar case tin; piping would lie short, and a gravitation scheme should he possible. The money saved should be available for further development. Reference has already been made to the proximity to the continent of Australia and to the southern base of the Pacific squadron. The opening of the Panama Canal is sure to have the effect of bringing many more large steamers co New Zealand. Trinidad, Vera, Cruz and Xew Plymouth should be the fuelling stations. It is freely stated that this will become a favorite steamer route, enabling passengers to escape the tying heat of the Red Sea. For the New Zealand trade, there is the great advantage at present —and one which will probably .exist for some time—that (he (ic'd is served by the main line of railway. OIL EXPLORATION'. Roth in the matter of production and .consumption the past year lias been a period of momentous importance to the petroleum industry, a year of great progress and a period unfolding possibilities in the use of oil which hitherto even the most sanguine had not anticipated. Concerning new discoveries—and Taranaki is accounted one of them—much has happened, and deposits have been found which are of unquestionable importance, some of them of such a nature that,! the whole future of the industry mag lie affected by their output. The British Empire has been shown to possess such deposits of oil as may practically revolutionise the fuel supply of the coming years, and for marine purposes the importance of the discoveries in Taranaki land Xew Zealand generally) can hardly he, ever-estimated. Up to tiie present o.nly 8 per cent, of the. world’s oil output has been secured within the Empire, ;imt, it is fully anticipated that within the next five years British colonies wd 1 place, Britain in the proud position o’; being one of the greatest, producers ariiong nations, Trinidad, Newfoundland and Canada all doing their share.

, ' THE FUTURE. It seems necessary to point out that the successful negotiations so far do not mean that half-a-dozen new bores will be started next week, and that we arc not likely to have oil-tanks sent out here by wireless to take m fuel. The flotation of a company such as this will take time, and it is not likely that any actual movement here will take place until late in the year. The purchase having been completed by the syndicate, and the new company formed, it will be necessary to engage .staffs, purchase machinery, and ship it out here. The stall will probably consist of a managing director and expert; an expert driller and geologist, and a chemist; expert drillers, /‘fishing men” to handle all casing jobs and shutting off water, and men engaged in the erection of derricks ami dwellings. Later will come refiners, and so on. Business of all k hid s' in New Plymouth must benefit from the introduction of (bis capital. Mr. Sydney If. North, writing in the Financial News of April 11 last, said:' “From reports which have reached me there can be little 'dtmbt as to the value of the product, the, analysis of which is so well known. The geological position of New Zealand in relation to the above oils is undoubtedly an excellent one, and there can he no lack of outlets of every description; in -fact, if the confidence of the colonial Government is justified, New Zealand may, in regard to oil sun My. become in a few years the ‘America of the west,’ and from recent reports which have come to hand concerning these new fields there can bo little doubt on this score.” The production from our present wells is a considerable one, ami by referring to statistics lately compiled by Mr, B. Thompson, of London, it will be seen that the average daily production of oil from American wells is only eight barrels per well. The average production of California itself is twelve barrels per well. Flowing wells of Taranaki that are producing their twenty barrels a day and of a thistly superior 1 quality, prove that our wells compare more than favorably with those of the West. Dr. Day, head of tho United Slates Geological Society, recently pointed out in a report to the Government that he estimated that by 10:15 all the oil that by reasonable conjecture cau he assumed to exist in Die United States of America will be exhausted. The importance of this statement cannot lie over-estimat-ed. It moans that in 20 years the onlire supply of petroleum in America will be gone. MR. CARTER TO CO HOME; It is necessary, before the sale of the company to the London people can be .completed, that one of the local directors shall go Home, and it has been unanimously decided by the directors that their'chairman, Mr. C. Carter, is to go. He will leave in about three weeks’ time. Apart altogether from (he expediency or otherwise of this course from, a local standpoint, it is one of the conditions laid dowil by Mr. llnirv that a member of (lie* directorate should meet bis principals in London. There will be much for Mr. Carter to do, and he will have fail authority to make the final settlements. It will he generally agreed tint no one is more fully qualified than the chairman of directors to perform this work. Ever since Ins appointment to Hie directorate, he has been keen on getting oil. not for speculative purposes, hut with a view of founding a profitable industry for Taranaki. So completely has he thrown himself into H>U work that one may* he excused for wondering how he has found the lime to conduct his own private business. He Is fully cognisant, as far as (he layman can he cognisant, of the whole of the operations, and he it was who had most to do with Mr. Henri' when he was here, and he may he relied upon |o use his undoubted business acumen in the final settlement of most important negotiation'. OIL FOR IRONS AND OPERATIONS. Mr. .1. Smyth, representing an ironsand syndicate, was in New Plymouth on Saturday. He paid a visit to the boros at Moturoa with a view to ascertaining the snpplv of oil which would lie available for fuel purposes in connection with proposed smelting operations.—“N own.”