I have the honour to acknowledge receipt of your despatch of 31st
August [1], relative to the Timor oil concession held by Mr A. J.

Staughton [2] For your information I am enclosing copies of the
letter sent to Mr Pascoe [3], who has an option over the
concession, vide my advice of 18th August [4], and of his reply
dated 11th September, 1937. [5]

It appears that Mr Staughton has received no information about the
revocation of his concession, and the fact that the Timor
authorities have been accepting rentals for the lease without
question right up to the present date, leads one to the conclusion
that no revocation has yet been made.

At the same time it is clear that the necessary field work laid
down in the conditions for the concession is not being carried
out, which makes the concession liable to cancellation at any
moment.

Moreover, it seems that while Mr Pascoe holds an option over the
leases, Mr Staughton and his company do not contemplate engaging
in active field operations. On the other hand, it appears that Mr
Pascoe is not prepared to spend money on the present concession
unless he can obtain additional areas, and in this respect, is
waiting on advice from the Timor authorities to his letter of 15th
June, and as to the result of the representations made by the
Commonwealth Government through the Embassy at Lisbon. [6]

Thus the position is not very satisfactory, and I am not sure that
you can do anything at the moment to further this particular
Australian interest, except to write personally to Major Fontoura
on the possibility of acquiring additional areas.