TNAG-0947-FCO40-1166-Oil-developments-in-and-around-Hong-Kong-1980 — Page 42

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CONEIDENTIAL

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الماAliK

НК

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TOP COPY

GR 250

CONFIDENTIAL

FM HONG KONG 2909562 OCT 80

TO IMMEDIATE F C O

TELEGRAM NUMBER 1425 OF 29 OCTOBER.

AND TO IMMEDIATE JEDDA.

1980

ль

$5.11.

PURCHASE OF SAUDI ARABIAN OIL BY HKG

1. HKG IS AT PRESENT SEEKING MEANS OF ASSURING ITS STRATEGIC

STOCKS OF FUEL OIL.

2. WE HAVE BEEN OFFERED 200,000 METRIC TONS OF FUEL OIL F.O.B. RAS TANURA TO THE RIGHT SPECIFICATIONS AND AT A REASONABLY ATTRACTIVE PRICE (US DOLLARS 214.50 PER M/T F.0.B.). WE ARE DEALING THROUGH A SINGAPORE MIDDLE-MAN BUT UNDERSTAND THAT ULTIMATE SELLER IS AN INDIVIDUAL, AHMAD MAHMOD, RIYADH.

3. GRATEFUL TO LEARN WHETHER YOU OR JEDDA SEE ANY DIFFICULTY IN SUCH A PURCHASE BY A COMPANY IN WHICH HKG HOLDS THE CONTROLLING INTEREST SINCE

<

(A) WE WOULD BE DEALING WITH AN INDIVIDUAL RATHER THAN PETROMIN,

AND

(B) THE PURCHASE WOULD BE TO BUILD UP STRATEGIC STOCKS WHICH WE

KNOW ARE NOT PARTICULARLY FAVOURED BY THE SAUDI GOVERNMENT ALTHOUGH IT SHOULD BE BORNE IN MIND THAT HONG KONG'S EXISTING STOCKS ARE FAR LOWER THAN THOSE HELD BY MANY COUNTRIES.

4. WE ARE TOLD THAT MAHMOD IS A MEMBER OF THE ROYAL FAMILY BUT OTHERWISE HAVE NO INFORMATION ABOUT HIS CREDENTIALS.

MACLEHOSE

MINIMAL

HK & GD

MED

ES & SD

CONFIDENTIAL