Vietnam signals it wants ExxonMobil deal despite China warning

HANOI (AFP) — Vietnam on Thursday signalled it wants to continue with a joint oil exploration project with ExxonMobil in disputed waters, despite a warning from China to the US energy giant to drop the deal.

Vietnam -- without mentioning the specific contract, a preliminary co-operation pact with state-run PetroVietnam -- reasserted its claim over parts of the South China Sea that are the subject of a dispute with China.

"We have confirmed that all Vietnamese cooperation with foreign partners in the field of petroleum is conducted in Vietnamese territorial water and in the exclusive economic zone," said foreign ministry spokesman Le Dung.

"These are totally under the sovereignty and right of Vietnam and in line with the 1982 UN Convention on the Law of the Sea as well as other bilateral and multilateral agreements between Vietnam and foreign partners."

Hong Kong's Sunday Morning Post newspaper, citing unnamed sources close to ExxonMobil, reported this week that China had warned it to drop the deal and said the project could threaten future mainland contracts.

Beijing, which is in dispute with a number of nations as it claims vast swathes of the South China Sea, says Vietnam's central and southern offshore coastal waters -- site of the exploration -- are part of its historic territory.

China's Foreign Ministry spokesman Liu Jianchao on Wednesday told a press briefing: "China's position on the South China Sea is clear and consistent. As for the case you mentioned (the Vietnam-ExxonMobil deal), China has stated our position to relevant parties.

"China opposes any actions that infringe upon China's sovereignty, sovereignty rights and jurisdiction over the South China Sea."

But Le Dung said on Thursday that "Vietnam will ensure all the legitimate interests of foreign investors when they operate in Vietnam.

"We welcome and shall facilitate all cooperation with foreign partners, including Chinese investors operating in Vietnam, on the basis of full respect for our sovereignty."

Last year, China criticised a joint deal between Vietnam and British energy giant BP near the disputed Spratly Islands in the South China Sea, saying the area has been an "indisputable part of Chinese territory since ancient times."

China and Vietnam -- who in 1979 fought a short border war after Vietnam expelled the Beijing-backed Khmer Rouge from Cambodia -- also fought a brief naval battle in 1988 near the Spratly Islands.

China warns Exxon over Vietnam deal-newspaper

20 Jul, 2008
REUTERS

HONG KONG: China has warned Exxon Mobil Corp to pull out of an exploration deal with Vietnam, describing the project as a breach of Chinese sovereignty, a Chinese newspaper report said on Sunday, citing unnamed sources. The article, which cited "sources close to the US firm", said Chinese diplomats in Washington had made repeated verbal protests to Exxon Mobil executives in recent months, and warned them its future business interests on the mainland could be at risk.

The protests involve a preliminary co-operation agreement between state oil firm PetroVietnam and Exxon Mobil covering exploration in the South China Sea off Vietnam's south and central coasts, the article said. It did not state when the co-operation agreement was signed. The report quoted the unnamed sources as saying Exxon Mobil was confident of Vietnam's sovereign rights to the blocks it was exploring, but it could not dismiss China's warnings out of hand.

The newspaper said China's foreign ministry did not immediately respond to queries about the situation and an Exxon Mobil spokesman refused to discuss any approaches from China. But it quoted Vietnamese Foreign Ministry spokesman Le Dung as saying it needed to be "clearly asserted" that Hanoi's dealings with foreign oil partners fell entirely within Vietnam's legal rights and sovereignty. China and Vietnam have a number of festering disagreements about territory.

The two countries dispute sovereignty over the Spratly Islands, a string of rocky outcrops in the South China Sea suspected of containing large oil and gas deposits and also claimed by Taiwan, Brunei, Malaysia and the Philippines. China supported the Vietnamese Communists in their decades-long war against South Vietnam and its US sponsors. But Vietnam has traditionally been wary of its larger Asian neighbour and in 1979 the two countries fought a brief border war after Vietnam occupied Cambodia and overthrew the murderous Khmer Rouge regime that favoured Beijing.

Though Vietnam and China have agreed to cooperate in oil and gas exploration in the Gulf of Tonkin in the north, last year BP Plc halted plans to conduct exploration work off the southern Vietnamese coast, citing the territorial tensions. And in December China chided Vietnam after protests in front of the Chinese Embassy in Hanoi proclaiming that the Spratly and Paracel islands belonged to the Vietnamese.