March 31, 2011
US oil giant ExxonMobil will begin exploratory drilling off central Vietnam in late April, official media reported Thursday, potentially angering China, which has objected to similar plans in the past.
The project will be located at "Block 119" off Danang city and the adjacent Quang Ngai province, the Vietnam News reported, but it was not immediately clear if the drilling was in a disputed area claimed by both countries.
The deal came at a meeting on Tuesday between Danang officials and ExxonMobil representatives, Vietnam News said.
China, which claims all of the South China Sea including the Paracel archipelago east of Danang, reportedly warned ExxonMobil to drop an exploration deal in the seas off Vietnam in 2008, though it is not clear if Block 119 was part of those objections.
Beijing and Hanoi have a long-standing dispute over the sovereignty of the Paracels and the more southerly Spratlys, which are both potentially resource-rich rocky outcrops that straddle strategic shipping lanes.
Vietnam boasts rich offshore oil reserves in the South China Sea where state-owned PetroVietnam, together with Russian and other foreign partners, exploits several major fields, but these are further from the disputed islands.
"It's hard to see how China will react" to the drilling, said Ian Storey, a regional security analyst at the Institute of Southeast Asian Studies, Singapore.
"I think it could be an interesting test case of where the dispute is heading."
China's increasingly assertive role in the South China Sea has raised tensions with other countries in the region as well as the United States. The Philippines, Brunei, Malaysia and Taiwan are other claimants to all or part of the Spratlys. Manila complained that Chinese patrol boats inappropriately harassed a Filipino oil exploration vessel in disputed waters near the Spratlys early this month.
At a security meeting in Singapore last year US Defence Secretary Robert Gates said Washington objected to any effort to "intimidate" US energy firms in the region. "Clearly, the oil companies have the backing of the US, politically," Storey said.
Danang's director of planning and investment, Huynh Duc Tho, said he was not aware of the report. A spokesman for ExxonMobil declined to comment when asked about the Vietnam News report.
Source: AFP Asian Edition http://www.newsmeat.com/news/meat.php?articleId=95549606&channelId=2951&buyerId=newsmeatcom&buid=3281
