120 Mr M. MacDonald, U.K. Secretary of State for Dominion Affairs, to Commonwealth Government

Cablegram 9 LONDON, 24 January 1938, 9.40 p.m.

SECRET

My Secret telegram No. 41 of 15th July, 1937, Timor oil concessions. [1] I understand that, in accordance with request contained in telegram from you to the Commonwealth Liaison Officer [2], His Majesty's Ambassador at Lisbon [3] made certain enquiries of the Portuguese Government.

Verbal answers have now been given by the Portuguese Government to the questions asked by you, as follows:-

(a) No oil concessions have been granted in Timor other than that to Staughton;

(b) As the Portuguese Government regard this concession as dead they would welcome application from Oil Search Limited as successors provided that they really intend to work;

(c) As to conditions, Oil Search Limited should approach the Governor of Timor [4] direct and obtain all necessary information from him, but any company formed for the exploitation of oil in Timor (as distinct from search) would have to constitute itself as a Portuguese company.

Portuguese Government state that they have no definite information regarding Oil Search Limited, and would be in a better position to judge between them and the Wittouck group if further information were made available. His Majesty's Ambassador at Lisbon thinks that if the company are in earnest they should immediately take steps on the lines suggested to obtain concessions and not allow themselves to be rebuffed or discouraged by local officials in Timor. The Secretary of State for Foreign Affairs [5] agrees, and suggests that if the Commonwealth Government attach any importance not only to obtaining concessions for an Australian company but also to excluding a competitor in the case of Japanese affiliations, they would be well advised to obtain for the Portuguese Government all the necessary information asked for regarding Oil Search Limited, and to take the necessary steps to press the claims of the Australian company.

1 Document 50.

2 Document 57. The Commonwealth Liaison Officer was External Affairs Officer, A. T. Stirling.

3 Sir Walford Selby.

4 Major Alvaro Neves da Fontoura.

5 Anthony Eden.

[AA : A816, 19/301/587]