TNAG-0947-FCO40-1166-Oil-developments-in-and-around-Hong-Kong-1980 — Page 48

CONFIDENTIAL # 18

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3.

China does not yet possess the technology to locate oil deposits at depths of 200 ft. of water, where the greatest potential in the South China Sea is understood to lie and would therefore

have to rely on outsiders to some extent. Foreign companies possessing the necessary expertise are likely to consider it more practical to operate

through Hong Kong.

4.

The Advisory Committee on Diversification, in Chapter V of the Committee's report dealing with Hong Kong's economic relationship with China, recommended, among other things,

among other things, that in the interests of facilitating the exploitation of new oil fields in the South China Sea and of ensuring that Hong Kong shares in the benefits of this, the Government should plan actively for the provision of a site for a logistics support base. This recommendation was accepted in principle by the Executive Council on 22 April 1980.

5.

Government has gazetted a proposed

reclamation of 76.15 hectares in north-east Lantau

for industrial development purposes.

The purpose

of doing this was to earmark a site that could be developed into an oil exploration support base,

/so

க C

G.F. 326

CONFIDENTIAL #B

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