The Taranaki Herald. (DAILY EVENING.) WEDNESDAY, JULY 8, 1911. THE OIL INDUSTRY.

Taranaki Herald, Volume LXII, Issue 144421, 8 July 1914, Page 2

The Taranaki Herald. (DAILY EVENING.) WEDNESDAY, JULY 8, 1911. THE OIL INDUSTRY.

Those sanguine people who eight years ago maintained that New Plymouth, or Taranaki, was well able to develop the oil industry without outside assistance must by this time have come to recognise that it is far too difficult and great an undertaking for local enterprise to carry to a successful issue. Had everything gone well and each succeeding bore put clown yielded payable oil a different conclusion might have been reached. The position to-day, however, is that after eight years of very strenuous and anxious work on the part of the directors of the present and other companies, after spending every penny of the capital that was raised in the Dominion and in London as the result of vigorous canvassing, there is still a long way to go before it can he said that the industry is established on a sound commercial basis. What has been demonstrated is that there does exist somewhere in the. district an oilfield of exceptional richness. It may be that Moturoa is only on the fringe of it, but there is no oil man who will not say that where close on a million gallons of crude oil has been won there must be, somewhere in the vicinity, a barge field. That the field has been practically exhausted is not to be thought of for a moment. Then the erode oil has been proved by actual experience in the refinery to bo very rich and valuable, and there arc no difficulties in the way of refining it and disposing of the products. All that the refinery wants is erode oil to work upon, and that is not forthcoming in sufficient quantity. It is common knowledge, and the fact need not he blinked, that the industry is still, as it has always been, handicapped by the want, of capital. With all its admitted wealth, New Zealand has not sufficient resources available for so speculative an undertaking as the development of an oilfield. It may have plenty for gold-mining, it has enough and to spare for horseracing, and if one of the wells at Moturoa suddenly developed into a great gusher there might be a rush of eager speculators with money to put into oil. It has been amply demonstrated, however, that for the sober systematic prospecting and development of an oilfield New Zealand cannot or will not at present supply the capital required. The Taranaki (N.Z.) Oil Wells, Ltd., may worry through its difficulties if fortune favours it a little better in the immediate future than it lias in the past. It may at any time get greatly increased yields of oil from its wells, hut even if it does there will still remain need, for a great deal more capital to drill oilier wells. Other companies are in no better position ; some have exhausted their funds and are waiting for something to turn up; others are straggling against difficulties with very limited resources to see them through. The time has, in fact, come when careful stock requires to be taken of the position. Only extraordinary luck or abundant capital from abroad can pull the industry through. To look for the first-named is unbusinesslike, therefore it seems to us that an effort must he made to obtain outside capital. To do this it will probably be necessary to place the .whole industry in .the melt-.

ing-pot and lor present shareholders to secure the best terms they can arrange. Most of their money is lost, and little short of a miracle can recover it for them. At present they have assets, hnt these assets are only a source of expense and they may melt away unless something is done. Quite recently the Imperial Government agreed to subscribe £2,200,000 to secure an interest in the Anglo-Persian Oil Company, bringing the capita! of the company up to £4,799,000. It is not necessary to say anything here about (bat company or its resources and prospects, though the Government's action has been criticised. The point we wish to make is this: that if the Imperial Government is prepared to find so much money for a foreign field, where international complications are passible, it might he induced to act similarly towards a New Zealand Held, where it is of equal importance from an Imperial standpoint, to find large supplies of oil. In a recent interview with a Globe representative, Mr. J. D. Henry, tbe well-known oil expert., said

"If llio Government goes through with it, and makes this investment in Persian oil, wo will soon have, criticism in those colonies which are developing their own oil sources for the bouclit of the Navj. This wilt certainly happen in Trinidad, Newfoundlaud, aml New Zealand, which lastmouiioned colony, it suouid not be forgotten, has contributed a battleship to ihe Empire's defences. In each oi these islands local companies, with local directorates, have put a great deal oi money into their oil hold undertakings ; wliilo in the ease oi New Zealand they have gone a stop further and erected a modern relinery in tho producing oil field at Moturoa, New iJlymoutn. In Trinidad, New Zealand, Newfoundland, and otne.r parts ol the Empiie, the work of tliscovery and development has been going on for many tears, and it groat results have not been secured it is because they have never had the advantage of large financial resources lilio the, liurmah Uil Company. There are, however, some eight oil 'companies, representing roughly 7000 shareholders, in Now Zealand. Mho .oil man of tho colonies, having applied in vain for uovemment assistance, will not bo likely to appreciate this investment of national money in. a country where wo only have suzerainty privileges.” Mr. Henry added; “Why start in Persia? And, if in Persia, why not also iu some of tho colonies in which proved oil territories have been oven more successfully developed tlian those of Persia? If this question is not satisfactorily answered 1 do not hesitate to say that there will b« more than ono growl of dissatisfaction in the colonies.”

This seems sound sense, and it suggests that something might be done here towards securing some measure of Imperial assistance. Possibly our own Government might be disposed to take an interest in the local field, for abundant supplies of oil fuel would be of immense value to it. But it is unlikely that it will see its way to find so large an amount of capita] as is really required. It might, however, use its influence with the Imperial Government, whose chief adviser on petroleum matters, Sir Boverton Redwood, it is understood, will pay a visit to the Dominion in the near future. Summed up, our idea is that the various companies operating or interested should recognise that the only reasonable hope of success for the industry lies either in practically giving everything away to foreign speculators, such as the Standard Oil or the Shell people, in which case they would lose all they have invested, or combining to pool all their rights and resources and through our own Government try and induce the Imperial Government to come to their assistance, in which case they might retain some interest to compensate them to some extent for all they have lost, A plucky fight has been made against very heavy odds, and the result is the practical demonstration that there is a valuable oilfield Jhere which requires far larger capital than can bo found in the Dominion for the purpose. If present shareholders are prepared to sacrifice everything no doubt American or other oil capitalists would willingly step in and in all probability reap a rick reward for themselves. They are doubtless watching one company after another succumb in the hope that they will presently he able to come in ’without having to pay more than “a song” for righls and other assets. But. the Imperial Government might he induced to give assistance on better terms. It is worth considering anyhow.