TNAG-0947-FCO40-1166-Oil-developments-in-and-around-Hong-Kong-1980 — Page 52

D G Jeaffreson Esq

CONFIDENTIAL

Secretary for Economic Services

Government Secretariat

HONG KONG

RIKK 1621 fikk

MIDEX

- 7 OCT 1980

No 23378381

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PALA

STAY

7 October 1980

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OIL DEVELOPMENTS IN AND AROUND HONG KONG

27

1. The latest we have had on the subject of a refinery in Hong Kong was Derek March's letter of 11 August to you reporting his conversation in China with the Director for Refining in the Petroleum Corporation. It would be useful if we could have an up-to-date Hong Kong Government view of the situation and a report of any current developments both in regard to a possible refinery in Hong Kong and the latter's emergence as a logistics support base for oil companies engaged in exploration in China.

2. We read with interest in the GIS sitrep of 2 October that Hong Kong interests are allegedly involved in Chinese plans to establish a logistics base at Shenzhen to service off- shore exploration activities and that the building of an oil refinery would be included in the plans. Mention was also made of the possibility of linking such a refinery by pipe- line with Tsing Yi Island. We would be interested in your comments, particularly on the Hong Kong angle.

3.

We have also seen recent press reports of your own state- ments on the oil supply situation in Hong Kong and the possible effects of the Iraq-Iran dispute. What in fact is the current stock situation and are steps being taken to diversify Hong Kong's sources of supply, if such a move is considered necessary?

4. I realise that you are hard-pressed at this particular time, but you will appreciate that, for the reasons which I explained when I saw you in June, it is desirable that we be kept abreast of important developments in this area.

P Morrice

Hong Kong and General Department

Cc: Dr D C Wilson, Hong Kong

PA B Thomson Esq, BTC, Hong Kong TE J Mound Esq MBE, PEKING

bcc: ESSD

FED