PUBLIC RECORD OFFICE
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C.O. 885
22 PUBLIC RECORD OFFICE, LONDON
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DRAFT Report referred to in the foregoing memor- andum of the Departmental Committee appointed to discuss certain questions with regard to the Oil Supplies of Barbados and Trinidad.
[This draft was seen by all the members, but never issued, as the matters dealt with were treated as confidential.-H.R.C.]
Acting on instructions received from the Lords Commissioners of the Admiralty and the Secretary of State for the Colonies, we have held a number of meetings, and have carefully considered all the correspondence which led up to the appointment of this Committee. We have called for and been furnished with special reports, analyses, and memoranda on doubtful points, and at our suggestion official communications have been made by the Colonial Office to the Admiralty and to the Governor of Barbados asking for further information which appeared to us to be of importance.
It will be convenient if we recapitulate shortly the events which brought into prominence the question of the oil supplies of Barbados and Trinidad.
Preliminary.-In connection with recent experiments in the use of oil as fuel in His Majesty's ships, attention has been drawn to the possibility of the Colonies of Barbados and Trinidad becoming sources of supply of such oil. In both these Colonies indications of the existence of petroleum have been found, and the oil has been worked on a small scale.
Barbados.-In Barbados operations have been carried on for some years by the West Indian Petroleum Company, who hold mineral rights over some 3,000 or 4,000 acres in the Colony. The whole land of Barbados is divided into small estates, the owner of the soil being owner also of the minerals; and rights to win oil are only obtainable by purchase or lease. The Company do not possess the means of largely extending their holdings; but they own refining works and tanks sufficient to carry on a limited business. In 1903 the Company applied both to the Colonial Government and to the Admiralty for assistance in extending their operations. In support of their applications they submitted reports by Professor Galloway and Dr. Boverton Redwood, who were sanguine that considerable quantities of oil existed in Barbados.
The Governor of Barbados was unable to recommend that assistance should be given to the Company from Colonial funds, but it was suggested that the Lords Commissioners of the Admiralty might be prepared, in their own interests, to take steps to secure an expert report on the prospects of the pretroleum supplies of the Colony.
The Lords Commissioners of the Admiralty, while recognizing the strategic importance of Barbados as a possible source of supply of fuel oil for naval purposes, were unable to entertain any pro- posals for the application of Imperial funds to the extension of the oil industry unless the Colonial Government were in a position to control the mineral rights of the island.
In Trinidad, where the bulk of the land is still in the hands of the Crown, the rules regulating the alienation of Crown Lands reserve to the Crown the right to coal and mineral oil; but the district in which indications of the existence of oil have been found is at present the subject of a special concession for five years, granted in 1902 to a Mr. Rust. In 1903 Mr. Rust applied for permission to transfer the concession to a Canadian company entitled "The Oil Exploration Company of Canada," who desired a renewal of the concession in a modified form for 21 years from 1907. The Governor of Trinidad submitted a draft of this con- cession for the approval of the Secretary of State. Mr. Lyttelton forwarded this draft for the consideration of the Lords Commis- sioners of the Admiralty, asking them whether they desired that steps should be taken to secure to His Majesty's Government a control of the supply of oil.
It was finally agreed that a joint Committee should be appointed to consider the general question of securing Government control of the oil supplies of Barbados and Trinidad, and in particular to discuss the terms of the proposed concession to the Oil Exploration Company.
REPORT.
In the event of the use of fuel oil in the Navy becoming general, it will be very necessary that it should be possible to obtain adequate supplies from sources within the Empire, and it is important that where such supplies exist the right should, if
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possible, be reserved of securing priority of supply to meet Government requirements at reasonable prices.
It must be borne in mind that crude petroleum is not suitable for use as fuel in His Majesty's Navy until its more volatile con- stituents (the light oils) have been separated in the process of refining or distillation, and the residue brought up to the requisite flash point of 200° Fahr. (Abel close test) laid down by the Admiralty as the margin of safety for a ship of war.
The light oils, while of importance commercially, are valueless for purposes of the Admiralty.
It is calculated that, if the use of cil fuel in association with coal should become general in the Navy, some 150,000 to 200,000 tons of oil would be required for consumption annually, and it is, therefore, anticipated that the Admiralty would be in a position to make use of the whole supply of oil of the proper quality likely to be produced in Barbados and Trinidad. Experiments which have been conducted with liquid fael from Barbados have shewn satisfactory results, but the amount of the present output is too limited to be of much value. Copies of reports on experimenta with samples of Barbados oil made by the Admiralty Chemist and Chief Inspector of Machinery are appended.
Samples of oil from Trinidad have given widely different results on analysis, and it has not yet been determined whether fuel oil suitable for the purposes of the Navy can be produced in Trinidad. An examination of the Mayaro-Guayaguayare oil field by the Government Geologist of Trinidad has shewn that the oil
is derived from two different strata yielding petroleum of somewhat different qualities. A report on certain experiments with Trinidad oil carried out under the direction of Professor Louis is appended."
In view of the importance which is attached by the Admiralty to securing a satisfactory control over all possible sources of supply, we are of opinion that steps should be taken, both in Barbados and Trinidad, to give the Imperial Government by legislation a priority of the supply.
In order to attain this result, it is necessary to ensure that the oil produced shall be refined on the spot, so that a supply of oil of the proper character may be available, and that the supply of oil shall be adequate, and not liable to be curtailed by any action of the proprietors of the oil rights. A right of pre-emption is of little value unless steps are taken to ensure that the output is not artificially restricted; and we recognise that the competition of the great syndicates in the United States and elsewhere may retard any purely commercial development of the oil industry in the West Indian Colonies unless the support and assistance of the Imperial Government is forthcoming.
On the other hand, it is not desirable, unless urgent necessity should arise, that the work of winning oil should be undertaken by the Colonial or Imperial Government.
In putting forward our recommendations, we have borne in mind the undesirability of introducing legislation granting a monopoly to any person or company, or interfering more than is absolutely necessary with the rights of private owners.
As regards Barbados, where the oil-bearing land is all in the hands of private owners, the Governor in Executive Committee has certain powers of compulsory purchase of land under the Compulsory Powers (Land) Act of 1888. Under this Act, the Governor is enabled to purchase lands required for any public purpose by agreement; and failing agreement, the question of the value of the land and the compensation to be awarded can be settled by arbitration or by a jury at the option of the party claiming compensation; the Government having an immediate right of entry after payment of the purchase money or com- pensation. We do not consider that further legislation to give the Government compulsory powers of acquirement of mining rights is needed at present.
We are of opinion that there is reason to believe that the Legislature of Barbados will recognise the benefit that would accrue to the Colony, in the employment of labour and the circulation of capital, from the establishment of the oil-refining industry on a considerable scale, with the possibility of Barbados becoming a port of supply for His Majesty's ships of war. The development of the oil resources of Barbados is of importance to the inhabitants of the Colony, as well as to the Imperial Government.
We therefore recommend that the Governor of Barbados should be invited to introduce juto the Legislature a Bill :-
(a) To forbid the sale or export of crude oil, éxcept with a licence from the Governor, which should be revocable at will;
• Not printed here: see 21161/04.
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