[?] Eases April, 1959

[?]apuan Economy Could be Affected

[?] No Oil, Papuan Boring

Since Vacuum Oil interests in February (see page 27 of March PIM) announced that it had no more funds for further oil-boring in Papua, after June, 1958, the possibility of a major oilfield being found in Papua has become more remote.

[NTIL the end of March, the I other two partners in the search for oil (the partners were lerican Vacuum Oil, 45 per cent.; itish Petroleum, 45 per cent.; and [ Search, mainly Australian, 10 • cent.) had not disclosed their entions. But a decision had to made —another £BOO,OOO had to found, somewhere, if the present •ing programme were to continue, [he Australian Minister for tional Development (Senator xmer) went to Papua at the end March, engaged in some con duces, and then announced; »■ The operating companies (Aus lasian Petroleum Co. Pty. Ltd., 1 Island Exploration Co. Pty. 1.,), owned by the three interests ned above, wished to retain their search area in Papua for about months. 1 It was proposed to complete ee bores (Komewu, Barikewa and i), and put down another one, ru.

Vacuum Co. would contribute more money after the completion the three current borings.

Negotiations were proceeding ler which the Australian Com iwealth Government might pro j a subsidy of £250,000, to allow remaining partners in APC to e the fourth hole (Kuru).

The three current bores would completed about August and (if bent plans were gone on with) fourth hole in April, 1959.

The companies did not wish to render the area in which they struck a good gas flow rikewa).

There was no indication of any tinuance of the boring (which i continued for over 20 years, cost £A3O millions) after April, I, but the whole situation could nge overnight, if an oil flow e discovered in any of the four is named. xperienced observers will watch new Kuru bore closely. That t is regarded as having the best cations of oil in the Papua field far examined. [eanwhile, owners of Oil Search . shares are still hoping.

Papua's Economic Outlook

essation of oil-search activities cut severely into the economy of iua, which in recent years has Listed itself to an annual APC

expenditure of at least £A2 millions.

There is possible compensation, however, in the plans of the British Aluminium interests to develop, with Purari River hydro-electric power, (or, alternatively, with gas

from that Barikewa bore) a huge industry on the South Coast of Papua for the refining of bauxite ore brought from new bauxite fields in Cape York Peninsula and Arn hem Land.

The Australian Minister, also, while in Moresby in early April, talked of the possibility of exploit ing valuable deposits of nickel in the Territory. But that, as yet, has not got far beyond the stage of wishful thinking.

We should not lose hope while a single drill is exploring the petro leum possibilities of Papua; but present indications are that Papua should get ready to take up a couple of notches in its economic bfelt.

(See Finance Editor’s Comment, page 164)