60

Cabinet Decision No. 458

Canberra, 15 August 1966

Confidential

Submission No. 387—Proposed Japanese participation in oil exploration and development in Papua and New Guinea1

The Cabinet approved the basic proposals of the Submission that Asian capital investment in Papua and New Guinea in the oil search and development industry be permitted and that Australian Aquitaine Petroleum Pty. Ltd. be authorized to enter into a joint working agreement with Japan Petroleum Exploration Company Ltd. for oil exploration and development. However, the Cabinet went on from this approval to an enunciation of a general principle relating to foreign, whether Asian or other foreign, participation in oil exploration and development in Papua and New Guinea.

2. The approval of the proposals of the Submission is set out using the words of the Submission in paragraph 3 below. The accompanying general principle is set out in paragraph 4 below.

3. The proposal as approved is:—

(a) Asian participation in oil search and development in Papua and New Guinea should be permitted on the same basis as already approved in relation to participation in the forestry and fishing industries;

(b) the application by Australian Aquitaine be approved as recommended by the majority of the Inter-departmental Committee subject to reference to the Administrator’s Council.

4. It is to be understood in the present instance involving the French company and in all future instances that it is not to be assumed that the Government will necessarily approve of a share of a lease already in foreign ownership being transferred to other foreign ownership and that any proposals in this direction will continue to require Australian Government approval.

5. It is not proposed that any general announcement of the principle set out in paragraph 4 should be made but it will of course need to be mentioned in the message of approval to Australian Aquitaine.

6. The discussion led also to the point that it would be important to check at this stage whether any additional stipulations should be brought into effect now so that at any time at which oil may be discovered the Administration is in a position to impose conditions about mining and/or refining which it considers necessary. This review should include the practicability of stipulations regarding Territory equity participation.2

[NAA: A5841, 387]

1 Document 57.

2 On 19 October, Cabinet also approved Japanese participation in the Territory’s steel shipbuilding and repair industry (see NAA: A5891, 506).