Search For Oil In Papua

Various Private Companies Try and Fail

Part 111.

A NUMBER of expeditions, hacked by powerful companies and subsidised liberally by British Governments, are now seeking an oilfield in Papua — and. probably, will succeed. This article, the third of a series written by a resident of Papua, tells the story of the discovery of petroleum in the Territory, and of the subsequent attempts at development.

DY 1919 the truth was plain to the Commonwealth authorities. For six years Dr. Wade had persevered against every imaginable obstacle. And the sole return for an expenditure that exceeded £lOO,OOO, was the certainty that oil ex isted in Papua. Whether it existed in commercially workable reservoirs was no more certain in 1919 than it had been in 1912.

But at least the Commonwealth had come to understand that in order to develop, or even to prove, a reputed oil field they must either be prepared to spend a great deal more lavishly, and must build up an adequate organisation of their own; or they must utilise in some way the vast resources of one or other of the great oil companies. It was not practicable to create the necessary specialised organisation to deal with a field which, though its promises were lavish, gave no certainty of ultimate re

turns; and the alternative course was adopted.

A tri-partite agreement was entered into, to which the British and Common wealth Governments and the Anglo- Persian Oil Company were signatories.

The British Government was to contri bute a sum not exceeding £50,000 to the cost of proving the field; and the Anglo- Persian Co. was to place its resources at the disposal of the two Governments in so far as they were prepared to finance them.

The arrangement proved unworkable.

Divergent views could not be completely reconciled; and the British Government withdrew from the arrangement, after contributing half the maximum amount agreed upon. The agreement was then re-constituted so that the Anglo-Persian Co. became the agent of the Common wealth.

Still, progress was slow. The slowness, however, was no longer due to lack of organisation and influence, but solely to the limit of expenditure that the Com monwealth Government had of necessity to impose.

A completely new geological survey was undertaken and carried out with great thoroughness, which covered the same ground as that of Dr. Wade, but

which brought somewhat different con clusions to the minds of the four geolo gists who made it. The main point of difference was that the new survey con demned the country about the Vailala river as being too broken and faulted for any extensive oil reservoirs to exist. Un questionably, oil in small quantities had been struck at shallow depths; and there seemed to them every likelihood that a similar measure of success might be ex pected in other bores in the same dis trict. But they argued that no true anti cline existed there; and that, even by the most modern methods, there was no chance of striking oil in sufficient volume to defray the expenses of boring.

On the other hand, they found at Popo, half way between the Vailala and Yule Island, conditions that approached their ideal. Such of the existing plant as they propose to use was moved there, and more suitable machinery imported, and the area at Vailala was abandoned.

The survey had taken a good deal of t me; and it was not until the early days of 1922 that actual boring was begun on the new site. By March, the hole was down to 350 feet, and by the end of July a depth of 1380 feet had been reached in sandy shale, from which a plentiful efflux of gas escaped through the bore-head.

This was strictly in accordance with what the geological staff had forseen; and it was not expected that the real oil horizon would be cut at any less depth than four to five thousand feet.

OUT even the pbwer Anglo-Persian Co. was not to be immune from trouble.

There can be no doubt that, working on

their accustomed scale, far more facili ties would have been made available than were at the disposal of the drilling staff under the financial restrictions imposed by the Commonwealth. Ministers either failed to realise, or could find no remedy for the fact, that by so drastically cur tailing finance they were not only delay ing results, but were also greatly increas ing the cost of whatever might ultimately be achieved.

The year 192£-23 was almost barren of results. At a depth of barely 1500 fee*t the drillers struck the same trouble as had interrupted operations on the Vai lala. Between the steeply sloping strata of rock, the drill encountered liquid mud of which the lateral pressure was great enough to throw the casing out of align ment, and ultimately to crush it alto gether.

This was an obstacle by no means un known to the Company’s drillers, and it could have been overcome at the cost of additional expenditure; but the Common wealth authorities were adamant. Already about £250,000 had been spent without any return; and the prospect of success, though it remained good, was not brigh ter than it had been at any time since the first geological report had been re ceived in 1912.

Ministerial feeling was much more in clined to abandon the expensive game altogether than to increase the annual expenditure on it; but in view of the strongly favourable reports of the Com pany’s officers, it was decided to continue operations for some time longer.

The first bore at Popo was abandoned at a depth of 1800 feet, and a second was started; but again structural troubles occurred which could not be overcome without extra expenditure, and the hole was abandoned at 890 feet.

The third bore gave greater promise.

By June, 1925, a depth of 2300 feet had been reached, before a string of tools broke adrift and was lost down the bore.

This entailed a long period of “fishing” for the lost tools; but they were even tually recovered, and the bore was con tinued to a depth of 2707 feet before it, too, presented difficulties that the exist ing plant could not overcome.

DURING 1923, the Commonwealth moderated its policy in relation to the oil field, and by an Ordinance passed at Port Moresby in July, prospecting licenses over areas not exceeding 1,000 square miles were thrown open for appli cation by private enterprise. Prospecting was to cover both oil and coal; and in the event of oil being discovered by the licensee on the area covered by his license, provision was made for the granting to him of a lease of 160 acres preferentially, and of a further area of 640 acres as a reward claim.

These conditions, though generous in comparison with those proposed in 1912, did not prove attractive to the big com panies. But several smaller concerns tried their luck. By June, 1924, six licenses had been granted; and a year later the number had increased to 14.

Most of the applicants were purely specu lative and only five of the applicants suc ceeded in raising enough capital to start

actual work. In no case was the amount raised great enough to enable them to persevere beyond the preliminary work and the first of the many unforseen ob stacles that, in Papua, seem to be in evitable.

The Commonwealth reserved to itself an area of 1160 square miles that in cluded the anticline at Popo and what the Anglo-Persian geologists considered the best structure for oil conservation.

The Papua Oil Exploratory Co. Ltd. was a syndicate company only; and its funds were barely sufficient to maintain on its area of 890 square miles between the Vailala and Lakekamu rivers the four Europeans called for by the condi tions of the license. Their area was very rich in surface indications, and had been the subject of a detailed report by E. R- Stanley. But money was hard to raise; and although the little concern expanded within a year to the Papua Petroleum Co. Ltd., its finances never permitted more than the use of a small scout dril

ling plant which struck a seepage of thin oil at shallow depth; and after existing precariously for two years, the company died.

The life of the Nabo Oil Development Co. No Liability, was even shorter and more barren of results. Two men with more enthusiasm than experience came over from Quensland with a plant that could never hope to do more than pierce the uppermost strata. Their hope was that the surface boring that they hoped to accomplish might yield results on which further capital could be raised.

But the theory was never put to the test.

Difficulties and the expense and delays

of transport swallowed their capital before they reached their destination; and the little company dissolved, leaving its plant scattered at various points on the Lakekamu river.

THE New Guinea Oil Co. Ltd. was the first concern to get down to serious work, after the passing of the Oil and Coal Ordinance of 1923. They selected a site some four miles west of the Vailala river, where one of the earliest discoveries had been made of mud and gas effusions: a site that had been recommended by Dr. Wade, condemned by the Anglo-Persian geologists, and again highly approved by Charles Moore, the managing director and the most active member of the new company. Of the

energy, resource, and purpose of this company there was never any doubt.

Preparatory work demanded several months of concentrated effort. A wharf was built at the bank of the river; dwel ling houses, storage sheds, native labour lines, and a road over four miles of soft and swampy alluvial land to the summit of an abrupt hill. Clearing was in itself a heavy task, as was also the difficult transport by tractors and lorries of the heavy machinery. But Moore’s patience and resourcefulness overcame the innum erable obstacles and won steady progress.

Before the end of 1925 the preliminary work was completed, the great steel der rick built, and the machinery in place.

And within six months the first bore had

been sunk to 1107 feet and cased with 12i inch casing. From the bore-head came a profuse flow of gas, with traces of oil; and the smell of petroleum per meated the camp.

But finances, carefully as they had been nursed were strained. The utmost use had been made of the funds available, but more must be found if the work, so well begun, was to be continued. Samples of the various strata encountered by the drill were sent to Australia, and the work was suspended until such time as further funds should be forthcoming.

The delay was a long one. The non success of the Anglo- Persian Co., and of all the other companies at work in Papua had the effect of making capital timid.

Private capitalists were unwilling to risk their money until the long years of search yielded some concrete results to justify the risk. But within six months Moore’s enthusiasm had resulted in the provision of sufficient funds to carry on for a time; and a probability had arisen that the Commonwealth would subsidise the further efforts of the company.

During the interval the bore had be come filled with mud-stone forced up from the bottom; and it was not until July 17, 1927, that the debris was re moved and the bore re-opened to a depth of 1270 feet. Dr. Woolnough, the Federal Geological Adviser, was expected shortly to visit the scene to report on the ad visability of subsidising the company.

Everything depended on his report; and in order to conserve what remained of the company’s funds, Moore reduced his staff to three whites and 50 natives, until the future prospects should become known.

Dr. Woolnough arrived on September 30. 1927, and stayed until October 12. On his instructions, 5 scout bores were sunk in the neighbourhood, and sample of fos sils and strata were sent to Canberra to be examined and correlated. He recom mended that a subsidy be paid on a pound for pound basis, with the condit ion that development should proceed on the lines that he laid down.

Work was resumed as soon as Dr.

Woolnough left; but it was not until mid- December, 1927, that drilling was con tinued.

To quote from Moore’s report: “On December 20 work on the well was re sumed, the well being found filled up from 1353 feet, the original bottom reached in October, 1926, to the 1132 feet level. I discovered that the bottom length of 12J inch casing, at 1142 feet, had become detached by some means while the plant was closed down. It was probably broken off by an earth movement. As it would not be possible to pull a 12iinch pipe through one of the same size, and the rest of the pipe was firmly cemented, this pipe had to be cut up and side-tracked.

“On March 17, I inspected the 10-inch casing past the obstruction, but found there was still a good deal of steel in the well in a chopped-up condition, which impeded progress. It may be mentioned that this detached length of casing weighed 980 lbs, and had attached to its

lower end a high-carbon steel shoe weigh ing 50 lbs. I therefore withdrew the 10inch casing again, recovering some 50 lbs of steel fragments in the bottom length.

The 10-inch casing was again inserted on April 3 last to 1200 feet, 30 feet past the spot at which the last obstruction was encountered.

“Gas made itself evident on several oc casions; notably when cleansing out the well after the casing bad been inserted.

This gas is probably coming from the bottom, and is responsible for the enor mous amount of mud that is brought up out of the well. Drilling proceeds very slowly, as the well is being continually re-filled with fresh material pushed up wards by the gas.”

He ended his report on the optimistic note that was characteristic of him; and, indeed, the results of his work justified optimism. In most countries of the world success would probably have been certain; for his plant was in excellent order, his buildings adequate and in good repair, and the motor vessel that main tained communication with Port Moresby and brought out cargo from that port was running regularly and doing invalu able work. Only the road —less road than cleared track —gave trouble by its need of constant repairs and the expense of effecting them; and health, though neces sarily far from good in such a climate, was at least no worse than was to be expected.

During April, 1928, the bore was con tinued to 1245 feet —still 128 feet short of its original depth and the 10-inch casing was set to that depth. But on the 28th the drill twisted off, and was not recovered until May 10. In the mean time the well filled again to a depth of only 740 feet from the surface, at which level the mudstone, under pressure of the gas, formed a bridge in the casing and prevented a further rise of the debris. But when the bridge was drilled out, mud and fragments of rock were again forced up the casing in such quan tities that the drill could make no pro gress. Attempts to thicken the mud, so as to increase its specific gravity, failed of the desired effect by the fact that the mud became too viscous, and at a den sity of 1.25 the pump could no longer deal with it.

The bore was closed down on June 9, 1928, and preparations were made to in troduce barytes, thereby increasing the specific gravity of the mud without affect ing its viscosity.

Twenty-five tons of barytes were im ported from Australia and transported to the boring site. But little more work was done there. The sets-back had been expensive, and it was impossible to fore see what other obstacles might present themselves. Again shareholders became reluctant and, in spite of the subsidy, refused to commit themselves to further expenditure.

Charles Moore was an enthusiastic worker and an indomitable fighter. But success had been too long delayed, not only in the case of the New Guinea Co., but in that of the Commonwealth itself.

Investors had lost faith; and although Moore continued to fight for capital as

long as he lived, his untimely death in 1930 deprived the company of its soul; and the concern was wound up in that year.

OP the three concerns other than those directly connected with the Com monwealth Government that made seri ous efforts to win oil in Papua, the hap piest was certainly the Oriomo Oil Co.

Ltd., of which the moving spirit was Mr.

S. N. McLean.

McLean had been for a time on the Vailala oilfield as a geological surveyor.

But the work was not to his liking, and he left after a few months.

The Oriomo Co. chose an area in the west of Papua; a tract of country that embraced the Oriomo river and about a thousand square miles to east and west of it. This district has the great advan tage, from the point of view of transport, of being practically rainless during the greater part of the year, when the ground is firm, and gives no hint of the sticky morass into which the rains will convert it from December to March.

Furthermore, instead of the dense jungle that clothes the greater part of

Papua, open grass and scattered gum trees offer good visibility over the undu lating country that comprises the area.

The early stage of the company’s work were probationary. A drilling plant was brought to Papua early in 1925. Pre liminary work included the building of a wharf at a spot about 40 miles up the Oriomo river, clearing a road of all ob stacles for a dozen miles from the land ing, and the erection of the usual build ings. The plant was then re-shipped

from Port Moresby and transported along the road to the selected site.

By August, 1925, the well was down to a depth of 1260 feet. This rapid pro gress, together with the favourable strata encountered by the drill, provided the justification that was needed; and the company was exempted from the work ing conditions specified by the Ordinance in order that more capital might be raised and the company expanded.

By April 23, 1927, McLean was back again with a staff of nine Europeans, and three boring plants. And within three weeks a geological prospecting bore was down to a depth of 100 feet, and surveys,

trigonometrical, topographical, and geo

logical, were all under way.

Indications in the trial bore had been encouraging; and those in succeeding bores were no less satisfactory. By the end of the year the two main bores, at

Maremosab and Wbhomul, were down 730 and 714 feet respectively, and gas and a showing of oil were present in both; while half a dozen scout bores, 100 to 150 feet deep, had been put down to test the structure beneath the heavy overburden of clay.

The bore at Maremosab was continued to 1580 feet by June, 1928, but bottomed at that depth in granite. This was the end of hope for that particular spot; and the casing was withdrawn and the hole filled in. At Wohomul, in the meantime, a depth of 1567 feet was reached in a schistose stratum; and although no oil reservoir was tapped in either of these bores, gas in large quantities, distinct traces of oil, and small quantities of paraffin wax, proved that the country was definitely oil-bearing.

The plant was removed from Mare mosab to Wonia, where a testing drill

had struck a good showing of oil at 175 feet; and a new hole was started there, the experimental one being filled in.

But the company was near the end of its work in Papua. The work had been done thoroughly and expeditiously; and without the tragic accidents and unfore seen difficulties that had hampered the efforts of other concerns. But non-success, combined with that of every oil-seeking company in Papua seems to have de deterred the directors from further ex penditure. There were other directions in which the company’s remaining capi tal might be expended.

Operations ceased in 1928; and the Oriomo Co. enjoyed the distinction of being the only mining company to date that had been in a position to remove its plant from Papua. (To be concluded.)