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.