VISCOUNT TEMPLETOWNMy Lords, I desire to ask His Majesty's Government whether, in view of the grave menace of the dependence of our Naval and Air Defence Services on alien or alien-controlled sources of supply of oil, His Majesty's Government will cease to leave the development of the Dead Sea oilfield to private enterprise, and will, forthwith, exercise its powers, under Article 11 of the Mandate for Palestine, and under Article 17 of the Agreement with the Amir of Trans-Jordan, itself to institute, without further delay, the prospecting for and development of these oil resources which are situated in a most strategic and easily accessible position and which are now under British control and protection?
§ THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR THE COLONIES (THE EARL OF PLYMOUTH)My Lords, I was not aware that the noble Viscount was going to ask this Question without developing and elaborating the subject. I am not quite clear as to the nature of the answer he expects from me in the circumstances, but I think that perhaps I might try to explain as briefly as possible to your Lordships what is the position in regard to this matter. I promise not to delay the House longer than is absolutely necessary. I need hardly say, to begin with, that the Government are fully alive to the importance of oil development generally, and that they seek wherever possible to safeguard the legitimate interests of His Majesty's Government. In the particular case which the noble Viscount has raised to-day, His Majesty's Government have proceeded on lines similar to those adopted in the Colonial Empire in the introduction of legislation designed to secure under proper conditions the development of such oilfields as may be found to exist. In so doing they have had in mind their duty under the terms 207 of the Mandate which lays down in Article 11 that the Administration of Palestine shall take all necessary steps to safeguard the interests of the community in connection with the development of the country.
Perhaps I might explain to your Lordships in a few words the provisions of the Palestine legislation in regard to this matter. In the first place, if anybody wants to investigate the oil possibilities of Palestine, an application has to be made for an exploration permit, and the applicant has to produce satisfactory evidence that he can command sufficient working capital and technical knowledge or assistance to ensure proper and adequate exploration. He has also to undertake to carry out a geological and mineral survey to the satisfaction of the Controller of Mines. This exploration permit is exclusive to the applicant, and the area of any one permit is limited to a Maximum of 500 square kilometres. The permit lasts for two years. If the holder fulfils those conditions, it gives him a preferential and an exclusive right to what is known as a prospecting oil licence, and that licence is over a portion not exceeding 4 per cent. of the area explored by him to the satisfaction of the Controller. Here again, before he is granted a prospecting oil licence, he has to give satisfactory assurances that he has sufficient working capital at his command and technical knowledge at his disposal.
I need not go into the details of the conditions governing these oil licences. They last, I think, for one year and can be renewed up to a maximum of five years, but, in the event of oil being discovered in economic quantities, he is granted what is known as a certificate of discovery. The holder of such a certificate has the right to apply finally for a mining oil lease which shall be granted, again under the conditions that I have enumerated, that he can produce evidence to show that he has sufficient working capital and technical knowledge. This mining oil lease is granted for a period not exceeding thirty years, and can cover at present an area of something like 1,000 square kilometres. This legislation is similar to oil legislation within the Empire and our experience is that it has worked perfectly satisfactorily in the past. Incidentally, your Lordships may be interested to know that a foreign oil 208 expert who visited Palestine described the Palestine legislation as one of the best combined mining and oil laws, from the oil operator's standpoint, with which he was familiar.
The noble Viscount in his Question suggests that the Palestine Government should cease to allow private prospecting for oil, and that they should themselves assume responsibility both for the investigation of possible oil resources and their development. I do not favour that suggestion. I say that quite frankly. I venture to suggest that the Government would be better advised to follow the procedure which has worked elsewhere with satisfactory results. I must remind your Lordships that so far as Palestine is concerned, the views with regard to the presence of oil there are conflicting, and no substantial oil resources have yet been definitely proved to exist. Therefore there seems to be every advantage in allowing companies or individuals who are willing and qualified under the law to take out exploration permits.
In this connection it must be realised that the mere existence of surface occurrences of oil, such as have been noticed round the Dead Sea, are not necessarily evidence of the existence of commercial oilfields. In the opinion of the Government the position can at present only be looked upon as speculative, and they would not, therefore, be disposed to consider the substitution of Government for private enterprise. Oil development at the best of times, as I think all your Lordships know, is a very risky undertaking, and can only be satisfactorily undertaken by people with considerable experience. If the work is to be properly carried out very large sums of money would have to be provided and if oil is not found this money naturally would prove to have been wasted. Speculative work of this character is hardly, I venture to say, a suitable medium for the investment of Government funds. Even if oil were found in substantial quantities markets would have to be found for it and further large sums would be required for the provision of pipe lines, storage, tanks, and, perhaps, refineries as well.
I have referred up to now to Palestine, but of course the noble Lord's question includes the area of Trans-Jordan as well. I should like to say that as far as 209 Trans-Jordan is concerned the position is similar to all intents and purposes to that in Palestine. The mining law is, in effect, identical but we naturally realise that constitutionally the position is different because the administration of Trans-Jordan has been delegated to the Amir and the Trans-Jordan Government. But the position in Trans-Jordan as well as in Palestine is that Article 11 of the Mandate governs the situation. The relevant portion of that Article is in these terms:
The Administration of Palestine shall take all necessary measures to safeguard the interests of the community in connection with the developiment of the, country, and, subject to any international obligations accepted by the Mandatory, shall have full power to provide for public ownership or control of any of the natural resources of the country or of the public works, services and utilities established or to be established therein.This portion of Article 11, I would like to emphasise, applies equally to Trans-Jordan. The only difference is that in practice we do not directly administer Trans-Jordan as we do Palestine, but by virtue of the Agreement to which the noble Viscount referred His Majesty's Government is enabled to carry out its mandatory obligations for the territory of Trans-Jordan.I draw attention to the wording of the Article which I quoted just now because 210 it seems to me important that it should be clearly realised that under the Mandatory régime both for Palestine and for Trans-Jordan it is the interests of the mandated territories themselves which have to be considered. In conclusion, I would assure your Lordships that both the Palestine Government and the Trans-Jordan Government would welcome the discovery of oil in their territories in economic quantities, but as things are I feel certain that your Lordships will agree that there is nothing to be gained by endeavouring to alter die existing procedure which contemplates development by means of private enterprise. I can assure your Lordships that His Majesty's Government fully appreciate the importance of any new oilfields, and that the position in the areas with which we are dealing will be closely watched in the future.
VISCOUNT TEMPLETOWNMy Lords, I wish to thank the noble Earl for the kind way in which he has dealt with my Question. I may say that I came here very much in ignorance of some of the things which I have heard to-night. I wanted to be quite sure that I knew the whole case because I wish to retain the right to draw attention to the matter again on a future occasion.
§ House adjourned at five minutes past seven o'clock.