CONFIDENTIAL #5
4
assess the future requirements of the oil industry in the South China Sea and the potential of Hong Kong as a supply base, taking account of economic, political, social and infrastructural factors. The Consultant's report, which was completed recently, will shortly be examined by the Working Group. Various detailed recommendations have been made but this is a draft report at this · stage and it would be misleading to list the
recommendations until the Working Group has consider-
ed them.
8.
So far, what has been made public are the appointment of the Consultant, the recommendation of the Advisory Committee on Diversification, and the existence of the Working Group on Oil Exploration in the South China Sea. The proposed
reclamation in north-east Lantau, has been
publicized in that it has been gazetted but there
has been a deliberate policy to avoid saying what
the site is earmarked for.
Developments on the Chinese side
9.
here.
The Chinese have a support base of a kind at Zhangjiang (near Hainan), but it is not known yet how that base could/would fit in with or
complement the facilities which would have to be
established in Hong Kong if a support base eventuates
Most recently, it was reported in the local press that China is considering setting up a support base and a refinery near Shenzhen in the area east of Shekou and north of Deep Bay. The project would apparently include the laying of an oil pipe to Tsing Yi Island which is to become an outlet base
for the refined oil. 41 the
ament has
so far heard nothing about this, these reports
/said