PETROLEUM (PRODUCTION) BILL. (Hansard, 12 November 1918)

VISCOUNT COWDRAY

My Lords, I greatly deplore at this hour to have to crave your indulgence to make one or two remarks relative to statements that have been made, affecting me or my firm, during the debates upon this Bill. The noble Duke (the Duke of Northumberland) who has taken an active part in the debates upon this Bill stated that— Certain landlords were under negotiation with Messrs. Pearson for boring for petroleum 1247 on their estates. These negotiations lasted a considerable time, and eventually fell through because Messrs. Pearson wished for an option of such an extended character that it practically amounted to a monopoly. These negotiations having fallen through, Messrs. Pearson entered into negotiations with the Government. My Lords, that statement is made under a misapprehension. It is not correct. Our negotiations had not fallen through when the Government asked us to commence drilling at once, but were as a fact progressing. The insinuation, it appears to me, contained in the statement is that my firm having failed to make arrangements with the landowners went behind their backs and entered into negotiations with the Government. It rather accuses us of not "playing the game." It was the Government who came to us. Our negotiations had not been dropped. They were continuing at the time when we were asked by the Admiralty to begin to drill, and therefore the statements of the noble Duke are entirely beside the mark and entirely inaccurate.

The noble Earl, Lord Stair, made a statement which also affected my firm. The statement was to the effect that— Some months ago I (Lord Stair) was approached by Messrs. Pearson with a statement that they had been asked by the Government to investigate the oil possibilities of the country. That is not correct at all. We never claimed that we were representing the Government. As a fact we were advising the Government as to the oil possibilities of the country. From the statement it would rather appear as if we had been approaching the landowners on the plea that we are doing so at the request or with the concurrence of the Government. That is entirely wrong. The noble Earl continued— I found they were offering my next door neighbour a royalty on a different scale from that which they were offering me. That is true, my Lords, we were offering his neighbour a higher royalty than we were offering to him, but the negotiations with the neighbour that he referred to had been continuing for several months prior to the time when we began negotiations with the Earl of Stair. In the meantime this question of royalty had been discussed with various landowners, and it was they, to whom we had referred the matter, who had fixed the royalty as being fair and right that we were offering to the 1248 Earl of Stair. Then the noble Earl continued— And the very next day I saw in the paper articles or letters signed by Lord Cowdray pointing out the iniquity of anybody being allowed to have royalties at all. I do not know that I need contradict a statement of that kind, but for the purpose of one's views being accurately reported I think I ought to do so. I have, whenever a question of royalty has been raised by the Government, always advocated the payment of a royalty, and it is totally inaccurate to say that any article or letter signed by me has pointed out the iniquity of anybody being allowed to have royalties at all.

The only other matter I have to refer to is to say that I shall most heartily support the noble Marquess, Lord Salisbury, when he asks the leave of the House to move for a Select Committee to inquire into the Agreement made with Messrs. Pearson in respect of the petroleum fields of the country. I recognise that such a Select Committee would be merely wasting its time in inquiring into an Agreement which, to those who will carefully read and study it, is self-explanatory without any further explanation or inquiry. It has to be borne in mind that the Petroleum Bill is a measure that I have asked for and insisted upon, as far as I was able. I was the one who knew the need of it and I therefore felt it my duty to impress upon the Government all I could the desire for some parental authority, as it were, over the oil industry.

But it is the Munitions Department that is responsible for the contract with us. It is not of my seeking. I was not anxious to offer my services to the country unless it was the desire, the strong desire, of the Ministry that I should do so. It must be remembered that the country will incur an expenditure of probably £1,000,000 in seeking for oil on my advice. Therefore I have very great responsibility in connection with the expenditure of this money, and I asked that if we were going to be morally responsible for this money we should have a free hand. It was essential that we should have the right to drill where information obtained in drilling the trial wells told us it was desirable we should drill.

The areas which we named to the Government represent about an average small county in extent. Each of the fifteen 1249 areas referred to amounts probably to about 50,000 acres on the average, and therefore the total acreage of the reserved areas would be 750,000 acres or three-quarters of the area of a county like Sussex. Naturally feeling the onerous nature of the advice we had given to the Government, and feeling that if oil were not produced we should be held more or less responsible for the non-success, we stipulated as conditions of undertaking the obligations which we have undertaken under the Agreement, firstly, that they should give us a sufficiency of money to carry out trials—that sufficiency of money being the £1,000,000—and, secondly, 1250 that we should have the right and the exclusive right to drill over the whole of the areas that were named to the Government as being the most likely areas within which oil would be found. I merely want to make the position of my firm quite clear as far as I can in a few words; and I leave with absolute confidence the contract as it is to speak for itself during the next twelve months within which probably it will be operative.