GR 270
CONFIDENTIAL
FM HONG KONG 310923Z OCT 80
TO IMMEDIATE F C O
CONFIDENTIAL
TELEGRAM NUMBER 1438 OF 31 OCTOBER
AND TO IMMEDIATE JEDDA
HKK 162
INFO HONG KONG GOVERNMENT OFFICE LONDON
K162/1
TOP COPY
$5.11.
37
YOUR TELNO 977 AND JEDDA TELNO 775
38
40
PURCHASE OF SAUDI ARABIAN OIL BY HONG KONG
THE OIL REFERRED TO IN OUR TELNO 1425 IS REQUIRED FOR THE TANKER STORAGE SCHEME DESCRIBED IN OUR TELNO 28 TO SINGAPORE. AT
THE TIME OF TELNO 28 WE HAD NO DETAILS OF POTENTIAL SELLER.
2. THE FUEL OIL OFFER UNDER DISCUSSION IS ATTRACTIVE BOTH BY REASON OF PRICE AND BY MEETING THE TECHNICAL SPECIFICATIONS PROVIDED BY OUR POWER COMPANIES WHICH ARE RELATIVELY DEMANDING. BUYING THE REQUIRED QUANTITY IN ONE BATCH IS ALSO ATTRACTIVE FROM A TECHNICAL AND PRACTICAL POINT OF VIEW. HOWEVER, IT IS ALSO VIRTUALLY TRUE THAT THERE IS NO ALTERNATIVE. SINCE 23RD SEPTEMBER
WE HAVE BEEN ATTEMPTING TO BUY FUEL OIL BOTH THROUGH TENDER AND
INFORMAL CONTACTS AND THIS IS THE ONLY REMOTELY SUITABLE OFFER
THAT HAS FIRMED UP.
3. THE ANSWERS TO THE QUESTIONS IN YOUR PARA 3 ARE:
(A) WE HAD NOT BEEN IN DIRECT TOUCH WITH PETROMIN BECAUSE WE HAD UNDERSTOOD THEY WERE UNLIKELY TO HAVE FUEL OIL TO SPARE
FOR SUCH A SALE. THE PRESENT OFFER OF COURSE ALTERS THIS AND
IF THE MAHMOD DEAL HAS TO FALL THROUGH WE WILL APPROACH PETROMIN.
(B) YES. SPECIFIC INVITATIONS TO TENDER MADE TO EXXON, SHELL, B.P., CALTEX, MOBIL, GULF, FEOSO, ARAMCO, PERTAMINA, ADNOC. THE FOLLOWING TRADERS WERE ALSO APPROACHED: C. ITOH, MARUBENI, PHILIPP BROTHERS, VITOL DERBY, NATOMAS, NICHIMEN.
(C) THE SITUATION IS PRESSING BECAUSE UNTIL COMPLETION OF TANK AGE AT NEW POWER STATIONS IN DECEMBER 1981 OUR FUEL OIL
LAND STORAGE CAPACITY IN RELATION TO CONSUMPTION WILL CONTINUE
TO FALL - TO AS LOW AS 23 DAYS CONSUMPTION IN THE CASE OF CLP.
WE ARE UNDER VERY STRONG PRESSURE FROM EXECUTIVE COUNCIL TO
BUILD UP STRATEGIC STOCKS QUICKLY BY USE OF FLOATING STORAGE FACILITIES.
MACLEHOSE
MINIMAL
HK & GD
MED
ES & SD
CONFIDENTIAL
41)
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