A South Seas Bonanza?

Oil and mineral prospectors are turning to the South Pacific in greater numbers. Fiji in December signed its first oil. agreement for off-shore prospecting. Tonga is still negotiating. Here are the details:

Fiji is to be searched for oil.

Southern Pacific Petroleum Fiji Ltd., in which an Australian and an American company are partners, will explore Bligh Water, to the north of Vitu Levu.

An agreement between Southern Pacific Petroleum and the Fiji Gov ernment was signed in December to cover an off-shore area of about 3,000 square miles. Minister for Natural Resources, Mr. D. W.

Brown, said the agreement was the first of several being negotiated with a number of overseas companies.

A 51 per cent, shareholding in the Fiji oil company is held by Southern Pacific Petroleum Ltd., an Australian company. The other 49 per cent, of the company is owned by Magellan Petroleum Australia Ltd., in which the Magellan Petroleum Corporation of the US has a 75 per cent, holding.

Earlier this year the two companies sent a seismic survey ship, Teledex IV, on a cruise through Fiji, Tonga

and coastal waters of Australia and New Zealand. The survey ship, it is understood, detected a thick sedi mentary section in Bligh Water.

Mr. lan McFarlane, chairman of the Southern Pacific companies in Australia and Fiji, and Deputy Chair man of Magellan Australia, said on December 19: “There is a good prospect of a large structure. But we would not like everybody to jump up and think oil is going to be dis covered tomorrow. In the long term we think the prospects will be very worthwhile”.

The agreement with the govern ment involves expenditure of $500,000 on seismic surveys and in the first three years.

If after that time the company wants to continue, the agreement calls for minimum expenditure of $U million in the following two years and after wards at least $3 million in each successive three year period.

The agreement is designed to bring

(Continued on p. 126)

Among other Islands mining developments in December was the signing of a prospecting agreement with Swiss geologist Bruno Campana to explore Fiji for bauxite, manganese and phosphate (see p. 113). Signing the agreement at the Ministry of Natural Resources in Suva are, from left, Fiji's Solicitor General, Mr. D.

McLoughlin, Minister for Natural Resources, Mr. D. W. Brown, Dr. Bruno Campana and Suva solicitor, Mr. M. J. C. Saunders. Back row, left, Assistant Minister, Mr. J.

Maisara and Secretary for Natural Resources, Mr. R. C. Strick.

exploration to the point of drilling a well within five years if this seems warranted. Drilling in off-shore con ditions like Fiji would cost about S 3 million. The agreement also allows for the grant of production licences and local financial participation in the event of an oil or gas strike.

Tongan Oil Search

Is Tonga going to make up its mind who’ll explore for oil? It is eighteen months after traces of oil were found, and well over a year since initial applications for explora tion rights began rolling in from overseas, and still there is no de cision.

Tonga has delayed for at least three reasons: it wants more advice on oil rights, it hesitates giving rights to a major producer which might put the oil “on ice”, and it would prefer a consortium, rather than one com pany.

Dr. Langi Kavaliku, Tonga’s Minister for Education and Public Works, has been reported as saying, “A major company might want to de velop oil slowly, keeping our deposits as a reserve while a smaller com

pany, wanting quicker returns, might want quicker development.”

He mentioned as a “major com pany”, Shell, which is still well in the running for the Tongan rights.

The other hopefuls are BP, Mobil, Aquitane, Magellan and Republic Mineral Corporation of Texas. The Republic proposal includes two Aus tralian explorers, Longreach Oil Ltd. and Abrolhos Oil NL, who would share costs.

It’s the only Australian interest, although Tonga is an area in which Australia should be taking a far bigger hand regarding vital natural resources such as oil. PIM under stands the Republic proposal, which, if accepted, would mean an expendi ture of Si million in two years, has been turned down by Tonga.

Republic had regarded Tonga’s chances of striking oil as one in 10; a high ratio against the usual chance of one in 100. See also p. 45.

Rennell Bauxite

Mitsui, diversified Japanese trader and miner, expects to make a de cision by August on whether bauxite deposits on Rennell Atoll, southern Solomons, are commercial and would support a mine.

Pitting, line cutting and sampling

is currently being handled by 70 Solo mon Islanders, under the direction of eight Japanese. Mitsui has formed a subsidiary, Mitsui Mining and Smelting (BSIP) Ltd., to handle its exploration under a prospect it holds until 1971 in an area on the western side of the 50-mile long raised atoll.

Mr. K. Shiobera, an executive with Mitsui Mining, told PIM Mitsui was aware of uranium oxide traces in the bauxite. Uranium could possibly be mined as a by-product, he said.

Developments on Rennell to facili tate the bauxite search include new dirt roads and a grass airstrip. Mitsui already has a stake in the Solomons through its large share-holding in the protectorate’s biggest trader, Solomon Islands Trading Company, based in Honiara. • Planet Metals Ltd., Australian based minerals explorer, began searching for copper on Normanby and Goodenough Islands, Eastern Papua, late last year. Another Aus tralian explorer, Petrocarb Explora tion NL, is reported involved with the Phillips Oil syndicate to sell natural Papuan gas and condensate to Japan. Talk is a freezing plant be built in Papua and the products shipped in refrigerated ships to Japan.