Canberra, 12 August 1966
Confidential
Proposed Japanese participation in oil exploration and development in Papua/New Guinea
[ matter omitted ]2
Prime Minister’s Department was represented on an inter-Departmental committee which has studied this question. External Affairs and ourselves were unable to go along with the recommendation that the current application be approved. We had regard to the fact that the criteria that have been laid down against which to judge Asian investment proposals envisage that proposals to be eligible for approval should depend on whether investment capital is readily available from other sources, whether Asian ‘know-how’ otherwise unavailable would be provided and whether specific benefit would accrue to the economy of the Territory as a result of the investment. We remain to be convinced that the present oil search proposal meets these particular criteria.
As the Minister himself points out at paragraph 11, approval of the current application would not necessarily result in the provision of new or additional finance for oil search in the Territory. The French company which holds the lease in the Territory acknowledges that its reasons for wanting to associate with Japanese interests are commercial. There is no evidence to suggest that it could not, if it desired, join with the English, American or other non-Asian interests in its oil search activities.
Clearly there are sensitive political judgements to be made. As we see it, an important extension of policy is involved and we believe that it ought to rest on more certain and demonstrated benefits to the Territory than appear to be the case with the present proposal. It is relevant to mention that there has been no Japanese or other Asian investment in oil exploration in Australia to date.
Should Ministers be of a mind to contemplate Japanese participation in oil search in the Territory, we agree with the Minister that the views of the Administrator’s Council should be sought before any decision is announced.
[NAA: A5841, 387]
1 Document 57.
2 Matter omitted is a summary of Document 57.