Sir Ian McFarlane (BSc '44, BE (Civil) '47) 1923-2008

As a young man unsure of his career path, Ian McFarlane asked his professor at the Massachusetts Institute of Technology for advice about a job offer. When the professor offered to swap jobs with him, the Australian knew he was on the right path.

McFarlane accepted the job, as a junior associate with the investment banker Morgan Stanley & Co in New York, and went on to instigate the revolutionary Queensland oil shale projects at the Rundle and then Stuart deposits near Gladstone.

Sir Ian McFarlane, who died of cancer at his home in Sydney in October at 84, was born in Sydney but grew up in Canberra where his father was a senior treasury official and later secretary to the Treasury Department. His father's postings around Australia and overseas meant he had stints at Melbourne Grammar and Harrow in Britain.

McFarlane enrolled in an engineering/science degree at Sydney University, but when World War II began, he joined the Royal Australian Navy Volunteer Reserve and worked as a research officer in the development of a homing torpedo with the US Seventh Fleet.

He completed his degree after the war before moving to the US to do an MSc at MIT. He added a secondary course in financial investment/economics. Realising that decision makers often came from the banking side of business, he took a summer internship with Morgan Stanley, which led to the job offer and exposed him to a number of big resources projects in the US and Canada.

In 1956, he married Ann Shaw and they had two daughters and a son. He returned to Australia in 1959 and joined Sydney broking firm Ord Minnett T. J. Thompson & Partners. In 1964, he became a director of Consolidated Rutile and deputy chairman of Magellan Petroleum Australia, which had just participated in the Mereenie oil discovery in central Australia. This was followed in 1965 by the discovery of the nearby Palm Valley gas field.

Seeking markets for Palm Valley gas, McFarlane established Southern Pacific Petroleum (SPP) and Central Pacific Minerals (CPM) in 1968 to explore separately for petroleum and minerals in Australia. The two companies made some small discoveries, but struggled to reach a commercial threshold..

During the first OPEC oil price shock of 1972-73, McFarlane began to think about oil shale as an alternative to Middle Eastern oil. His days at Morgan Stanley and later with Consolidated Rutile's Stradbroke Island mineral sands deposit had taught him that the best economics would result from a deposit that was high grade with minimal overburden, could be mined by open cut, and was close to infrastructure including port facilities. These criteria could be met in the shallow basins along the Queensland coast

The best of these was a deposit named Rundle, and when SPP and CPM joined forces to appraise them they became known as the "Rundle Twins". By 1980, there was sufficient data to attract farm-in bids and the headlines that year screamed the news that Exxon's subsidiary Esso Australia had come in as a 50 per cent farm-in partner and operator to develop the Rundle deposit.

For various economic and technical reasons, and to McFarlane's chagrin, the project dragged into the mid-1980s without development and finally petered out altogether.

McFarlane decided to begin again with a new project and picked the nearby Stuart deposit. He also began to develop a new rotary kiln retorting process. A new partner, Canadian company Suncor, was brought in and a unique pilot plant was established.

Teething problems continued to dog the project and Suncor withdrew in 2001. McFarlane's companies struggled on alone in the early 2000s and did produce and sell more than 1 million barrels of shale oil and refined oil from the plant. However, critics, including Greenpeace, maintained that greenhouse gas emissions and odours from the plant were unacceptable. Costs to fix these problems rose to breaking point and eventually receivers were called in late in 2003, resulting in the sale of SPP/CPM assets in February 2004.

McFarlane never lost his dynamism and never stopped believing in the worth of the oil shale deposits for Australia, with their billions of barrels of oil in place. It was his hands-on enthusiasm that built a loyal, dedicated team at SPP and CPM and the companies' demise was a great disappointment.

McFarlane's humanitarian side was evident in his significant contributions to medical research and scholarships as well as donations to charitable organisations and community projects that included the Royal Brisbane Hospital Research Foundation and the Great Barrier Reef Research Foundation. He was made a knight in 1984 for services to business and community.

Ian McFarlane is survived by his daughters Jennifer and Sharon, son John, and six grandchildren.

This is a slightly edited version of the obituary published in the Sydney Morning Herald 30 October 2008.