95 Commonwealth Government to Sir Walford Selby, U.K. Ambassador to Portugal, and to Sir Thomas Inskip, U.K. Secretary of State for Dominion Affairs

Cablegram 57 25 May 1939,

Reference Timor Oil Concessions and representations made by Commonwealth Government July 1938. [1]

We understand Dodson [2] was assured of obtaining concession from Portuguese Government on behalf of the two companies he is representing, namely Oil Search and Oil Concessions. Following conference with Commonwealth Government, Oil Search stated they were not prepared to go on with proposal. They did not think conditions of contract were sufficiently attractive to tempt Australian investors under present international conditions.

Oil Concessions, however, are of opinion that conditions of concession are satisfactory. The Directors of the Company are prepared to proceed with concession and raise capital required, but it will be appreciated that until they hold actual concession they cannot place before their shareholders any concrete proposal.

Commonwealth Government is satisfied Oil Concessions is a reputable company. The Directors give what my Government considers to be satisfactory assurances of their financial and technical competence to operate the concession, and it is understood Dodson himself can command substantial backing by United Kingdom financial interests. The Company has already spent some 5,000 in connection with the concession and has telegraphed the required deposit of 1,000 to Lisbon.

From the point of view of Commonwealth Government, and I have reason to believe of the United Kingdom Government, it is most desirable that the present effort to anticipate any foreign oil interest in Timor should not be allowed to collapse, and we would be grateful if you would cause immediate representation to be made to highest Portuguese authorities concerned on lines set out above with a view to obtaining the leases for Oil Concessions.

We understand Minister Colonies [3] leaves Lisbon June 5th which leaves little time to finalise matters. [4]

1 See Documents on Australian Foreign Policy 1937-49, vol. I, Document 233.

2 A.R. Dodson, representative of Oil Search Limited.

3 Dr F.J.V. Machado.

4 The draft of this cablegram was approved by Cabinet on 25 May 1939. See AA: A2697, vol. 1, 25 May 1939, Minute 46.

[AA: A981, TIMOR (PORTUGUESE) 22, iv]