76. Mr. POINTERasked the Secretary of State for the Colonies if the United British West Indies Petroleum Syndicate, Limited, is a private company; whether, although it was registered on 18th July, 1912, the names of shareholders and directors were not filed until 23rd May of this year; whether in the meantime it had conducted negotiations with Colonial authorities and had secured an option to purchase the properties of the Trinidad Oilfields, Limited, and had concluded an agreement with the Colonial authorities concerning the pipe-line and other business in Trinidad; whether the fact that two of the four companies of which the syndicate is composed are partly under foreign control is in agreement with the covenant that the lessees shall at all times remain a British company, and that the chairman and a majority of directors shall at all times be British subjects; whether he has any means of knowing who the directors are when appointed under the terms of the secret agreement; and, if not, how will he ascertain whether they are British subjects or not?
§ The SECRETARY of STATE for the COLONIES (Mr. Harcourt)The United British West Indies Petroleum Syndicate Limited, is a private company, registered on 18th July, 1912, to take over an agreement then being negotiated with the British and Foreign General Securities and Investment Trust, Limited. The text of the agreement will be found in Command Paper 6861. The third schedule to that agreement contains the form of lease which will be granted, if applied for on the expiration of the prospecting licence in the second schedule. As is the rule with leases of Crown Lands in Trinidad for oil mining purposes, Part VII., Clause 1, of the proposed lease provides that the lessees shall be a British company, registered in Great Britain or a British Colony; that the chairman and a majority of the directors shall be British subjects; and that the lessees shall not be directly or indirectly controlled by foreigners. It is usual to require provisions to this effect to be incorporated in the memorandum of association of any company holding a lease, and I have no doubt that this will be clone by the Governor when the time comes. The lease requires alterations to be reported to the Governor, and enables him to disallow alterations affecting the British character of the company and to cancel the lease on breach of the clause. In these circumstances I see no reason to anticipate any attempt at evasion of the clause, but, if such an attempt were made. the Governor has ample power to deal with it.
Mr. POINTERHas the right hon. Gentleman knowledge as to the exact method by which the directors are to be appointed, and under the secret agreement will he be able from time to time to keep a check on any change in the directorate?
§ Mr. HARCOURTOh, yes, I will take care to check these matters from time to time.
§ Mr. HARCOURTI cannot say exactly.
77. Mr. POINTERasked whether, in the recent agreement entered into with the United West Indies Petroleum Syndicate, Limited, to explore, prospect, and to take out mining leases for oil in Trinidad, the syndicate have secured rights to take out mining leases for oil over 100,000 acres of land; if so, what is the limit of land 1493 over which they can prospect for oil; whether the usual royalty in Trinidad is 10 per cent., and, if so, what are the reasons for granting this syndicate the privileges contained in the agreement at a royalty of 2s. per ton, which at present prices is only equivalent to 5 per cent.; whether after a lapse of five years it is arranged that a rental of £10,000 per year is to be imposed with an arrangement that if the royalty at 2s. per ton exceeds the rent the latter is to be wiped out; and what are the reasons which induced the Colonial Office to agree to these terms for a period of fifty years, with a further option of thirty years?
§ Mr. HARCOURTPart IX., Clause 7, of the schedule to the lease provides that the total area to be held by the lessees at any one time shall not exceed 100,000 acres. The Government have given the syndicate an exploring licence over 198,555 acres. Any further area which the syndicate acquires from the Government or from third parties can be included in this or the prospecting licence. The usual royalty on oil won from Crown Lands is 2s. a ton, but a reduction is allowed on large quantities to encourage production on a large scale. The provisions as to the fixed rental of £10,000 a year, which is really a minimum royalty, not a rent, will be found in Part V., Clause 2, of the schedule to the lease in Cd. 6851. As regards the period, I saw no reason to object to the syndicate's request for a lease for fifty years, with the right of renewal for thirty years, subject to the provisions as to increased royalty which will be found in Part VIII., Clause 2, of the schedule to the lease. I may add that I hope shortly to arrange another lease on the same terms as regards areas, royalty, etc., with a different corporation.
Mr. POINTERDoes not that answer in fact mean this: in effect the prospecting royalty has been given extending over fifty years over this 190,000 aces; and that Crown Lands are going to be closed for agricultural purposes for that limit of time?
§ Mr. HARCOURTI do not think that is the case at all.
Mr. POINTERHave not the company the right to keep this land during prospecting, and, if so, how can it be used for agriultural purposes?
§ Mr. HARCOURTIn the agreement the conditions under which land can be taken up are laid down.
Mr. POINTERIs the right hon. Gentlenian aware that the local opinion in Trinidad is that they do not want to let out land for agricultural purposes until after the prospecting has taken place, because it always leads to disagreement, especially when the question of compensation for disturbance conies along?
78. Mr. POINTERased the Secretary of State for the Colonies whether his attention has been called to the dissatisfaction and doubt in the minds of the members of the chamber of commerce and others in Trinidad as to the exact meaning of paragraph 3 of the pipe-line agreement entered into by the United British West Indies Petroleum Syndicate, Limited; whether he can give any assurance that the words inserted in brackets, not being a combination of owners for this purpose only, do not in reality constitute a practical monopoly of oil-carrying and will not prevent smaller companies from combining together to lay down their own pipe-lines; and, if so, will he give such assurance without delay?
§ Mr. HARCOURTMy attention has been called to certain questions asked in the Legislative Council, on the 21st of May, and to the replies, which appear to me satisfactory. The third clause of the agreement referred to does not, in my opinion, constitute a monopoly of the construction of main trunk lines as common carriers, still less of the carrying of oil. The clause is intended to prevent wasteful duplication of the main trunk system of transport, and so to secure the assumption by responsible undertakers of the obligations of common carriers, to which existing companies objected as an onerous lability when the Pipe Lines Ordinance was passed. My hon. Friend will sec on reference to Cd. Paper 6861, that it contains nothing to prevent owners piping their own oil to the seaboard or to a refinery, that a combination of o-Nners not formed for the purpose only of laying a pipe line is not necessarily excluded, and that if it is established that a main trunk line is not working satisfactorily, competition is not precluded. Applications to lay pipe lines will be considered on their merits, but I can give no assurance that any person will be allowed to lay a pipe line in contravention of the agreement.
Mr. POINTERIs the right hon. Gentleman aware that local opinion in interested circles is distinctly of opinion that the words quoted in the question, namely, that the persons concerned were not a combination for this purpose only—for the laying down of a pipe line—hardly bear out the purport of his answer, and are causing a tremendous amount of dissatisfaction; and can he not give some further assurance that a monopoly will not in effect be created beyond what is in the agreement?
§ Mr. HARCOURTIf my hon. Friend will study the terms of my answer I think he will see that the assurance is given.