CONFIDENTIAL #2

- 6

Oil

(9)

Oil reserver

(10) Oil

Explor- ation in the

South China Sea

To establish

strategic reserves of oil products

To consider

the possible

role of Hong Kong as a

support base

(a) The 4 industry shareholders

(power and oil companies) of Owensbord transferred their shares to the Government.

(b) In line with ExCo's decision, the two major power companies continue to maintain strategic reserves of fuel oil amounting to about 60 days' supply. The situation will be reviewed by the Energy Policy Committee in October.

(c) The voluntary Code of

Practice for maintaining strategic reserves of fuel oil, gas oil and naptha was implemented.

In May 1982, the Governor in Council ordered

(a) that the proposal to develop Penny's Bay as a support base be shelved for the time being;

(b) that the design work on the proposed reclamation and

the processing of the statutory objection in connection with the gazetting of Penny's Bay be completed nevertheless; and

FSB to manage Ovensbord.

Monitoring of the power companies' holdings of fuel oil to be continued.

To monitor the oil companies' performance against the Code of Practice.

To k.i.v. items (b) and

(c).

GF 323

CONFIDENTIAL #2

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