Timor.

Your telegrams of 11th, 19th and 27th April. [2] Had further long
discussion with Cadman [3] on 26th April. He showed me a report by
his experts indicating that while there was quite possibly some
oil in Timor, the expenditure of about 250,000 would probably be
necessary even to ascertain the possibilities. Also that Dodson
[4] and his associates in Australia had no oil organization or
experience behind them. We agreed that the most practical course
to be adopted would be for the United Kingdom Government to
approach both the Anglo-Iranian and Shell, put the facts before
them, including political aspects, and suggest that they should
take hold of the position. I also urged that the Mines Department
be represented at the next Foreign Office meeting.

Meeting held on Monday evening with Butler [5] and Foreign Office
officials, the Ambassador at Lisbon [6] and Mr. Cecil Rigby of the
Mines Department. Rigby reported that Cadman had now seen Anglo-
Iranian and Shell and they were considering geological survey of
both the eastern and western areas in the near future, probably by
small expedition recruited from their staffs in Australia or
Borneo. Shell representative had stressed that Anglo-American
Company must also be consulted.

It was generally agreed that the above course most desirable and
that Mines Department should urge Companies to go ahead with both
Dodson and American Company at once. Dodson should therefore
remain in London until action decided on but immediately
afterwards return to Australia in order to fulfil obligations
under the eastern concession (possibly stopping off at Lisbon to
reassure the Portuguese authorities).

I urged that we should now discontinue proposal to buy Wittouck
[7] out while at the same time trying in every way to stiffen
Portuguese to resist further Japanese pressure, co-operation with
American Company being particularly valuable in this respect.

Butler stressed the value of joint effort by the United Kingdom
Commonwealth and Dutch and the head of the Far Eastern Department
[8] urged the desirability of responding to the efforts of co-
operation vis a vis the Japanese by Dutch Ministers both in London
[9] and Lisbon. [10] It was agreed that the Foreign Office should
now send for Dutch Minister, tell him that so far as oil was
concerned Shell (and Anglo-Dutch) companies were now interested in
the matter and, so far as mineral, agricultural and shipping
development was concerned, ask him what his Government was
prepared to do.

Question of airline was raised by Dutch Minister when he visited
the Foreign Office on 18th January but I have asked the French
[sic] Office to endeavour to keep off this aspect having regard to
the views expressed in the last paragraph of your telegram of 18th
March. [11] I have again urged the Ambassador at Lisbon to press
immediately on his return to Portugal for finalization of
agreement for Darwin-Dilli air service.