PUBLIC RECORD OFFICE
Reference :--
mwmiwmimC.O. 885
22 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC. COPYRIGHT PHOTOGRAPH-NOT TQ,
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Government was forthcoming. It was regarded as desirable to introduce legislation granting a monopoly to any person or company or to interfere more than was absolutely necessary with the rights of private owners.
It was not contemplated to grant actual financial assistance to any company, but that a company possessing oil rights over a district in which satisfactory indications of petroleum had been found would, if assured of a favourable contract to supply fuel oil to the Admiralty, be enabled to raise the necessary capital for prospecting, drilling, and development work.
The principles underlying the legislative rules which it was resolved should be drawn up for Crown Colonies were agreed between the Oil Fuel Committee at the Admiralty and the joint Committee at the Colonial Office. The rules were drafted in order to meet the particular situation created in the Island of Trinidad but it was recommended that no material provision should be omitted from any lease of oil rights unless it should be shown to be incompatible with local conditions or likely to operate as a serious check to the proper development of the oil field. The main principles embodied in these regulations were :— (1) A stipulation that the concessionaires shall be British, and, if a company, that the pre- dominating element in the control shall be British.
(2) Prohibition of the export of crude oil or of the products of refining (which embrace the oil residues) except by licence from the Govern. ment which shall be revocable at will, thus securing that the crude oil shall be refined on the spot.
(3) Right of pre-emption of all crude oil, and of the products of refining, in favour of the Imperial Government at a price to be agreed upon, or, failing agreement, at their com- mercial value, to be determined by arbitration.
(4) With the object of ensuring that there shall be no intentional or artificial restriction of the output, that a condition shall be embodied in the sale or lease of oil rights, or in any sale or lease of land for the purposes of winning oil, that the purchaser or lessee shall actively carry on the work of mining for oil, and that, in default, the oil rights shall lapse.
(5) Regulations as to the site of any refinery, storage, or place of shipment to be vested in the local authority.
(6) A stipulation that the refining processes shall be carried on in such a way that the oil residues produced shall be of a suitable quality for naval purposes.
(7) A condition to be inserted that the output for naval uses shall be extended in time of emergency, and that the Imperial Govern- ment shall have the option of taking complete control of the lessee's works in time of war.
As a result of these recommendations Ordinances were passed in the Crown Colonies securing, wherever possible, mineral oil rights to the Government, and laying down rules for the proper regulation and development of the oil industry on the general lines indicated above. Moreover,
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model licences to explore or prospect for oil and leases to win oil were drafted embodying these rules; the con ditions of any licences or leases which have been granted to individual persons or companies have been based upon these models with occasional slight modifications suited to the commercial exigencies of each case.
Copies of the various ordinances, regulations, model licences, and leases, which deal not only with the operations of winning oil, but also with its refining, transportation, and the proper administration of an oilfield, are attached.*
In 1906, the opportunity was taken, on a report of discovery of oil in the Orange River Colony, to bring the regulations to the notice of the Governor.
Further, as the outcome of representations by the Admiralty in 1906, the Secretary of State for the Colonies addressed a circular to the Officers Administering the Governments of Crown Colonies requesting that "in every case in which it is proposed to grant Crown land, whether freehold or leasehold, mineral oil and the right of the Crown or its grantees to enter upon the land for the purpose of winning and taking mineral oil may be reserved to the Crown, and that he should be consulted before any lease or grant is made of lands under which it is believed that deposits of mineral oil may exist."
in
Measures were taken at a very early stage to ensure that any discoveries of oil or evidences of its presence any part of the British Possessions should be at once reported to the Colonial Office, and this action was not confined to Crown Colonies, but was extended to the self-governing Dominions. Moreover, periodical reports are obtained from the Colonies showing the progress that is being made in searching for oil and in development work. Similarly, the Governments of Canada and Newfoundland were asked in 1911 to "to furnish reports from time to time on developments in the oilfields of New Brunswick and Newfoundland whenever
had been material any
progress made."
In July, 1911, the principles laid down, as detailed above, were brought to the notice of the New Zealand Government, the Secretary of State for the Colonies, at the request of the Admiralty, addressing a despatch to the Governor, in which attention was called to the importance of oil fuel to His Majesty's Navy and to the desirability of making provision in leases of Crown lands for the effective working of oil deposits and for Government control of the output in time of emergency.
In the previous year the Canadian Government had provided for the right of pre-emption of oil being secured to Government, and a copy of the Canadian Gazette of 29th October, 1910, containing the regulations which had been adopted, together with a model lease, accompanied the despatch which was sent to New Zealand.
In July, 1912, the New Zealand Government replied that, while it was impossible to make the suggested regulations retrospective, they had every desire to meet the request of the Admiralty and would immediately consider whether the Mining Acts should not be so amended as to cenuble the Government, in respect of all future warrants and licences, to impose conditions which would enable His Majesty's ships to have always a prior right to such supply of oil and petrol as may be required and to the right of pre-emption.
• Not reprinted.
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