PM Transcripts

FOR PRESS 1 February 1977
CRUDE OIL PRICING
The Cabinet commenced today its discussions on crude oil pricing
arising out of the I. A. C. Report of 30 September, 1976.
Consideration of the Report has been deferred until now ' because
of the absence of the Minister for National Resources, and this
is the first opportunity Cabinet has had to discuss the Report
with the Minister for National Resources present.
The Report is concerned with -the price to be paid to producers
to September 1980 of crude oil. from known fields.
Some questions were raised in the discussions which were not dealt
with in the I. A. C. Report or in the Cabinet Submiss ions and
Ministers have therefore decided that there should be some itirther
clarification by a small committee of permanent heads.
The importance of the discussions was emphasised to Ministers
by the I. A. C. Report that over 400 million barrels of oil could
be recovered uinder import parity pricing that would not be
recovered at existing prices representing an addition of about
percent to known recoverable reserves. Not to exploit these
additional reserves would involve heavy expenditure on imported
oil with all the consequences for the economy and the balance Of
payments that that would involve.
A-fter 1980 ' Local production of crude oil from existing field.-
Will decline and Australia's self sufficiency -in oil. production
will drop steeply. It is estimated that by 1985, if no new fields
are found, the value of crude oil imported will total about
$ 2,500 million at current price levels.
The committee of Permanent Heads has been asked to ' report u-r(, ntly.
The Cabinet wi] ll -resume consideration when the report is avaiilable.
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