Energy project: Hanoi seeks to push ahead amid China pressure

Chinese ship in South China Sea waters raises questions over ExxonMobil joint venture

Vietnam, locked in one of its most protracted test of wills with China of late, is trying to allay fears that yet another foreign joint-venture energy project in the South China Sea may be canned because of pressure from Beijing.

The question over American firm ExxonMobil's involvement in the Ca Voi Xanh, or Blue Whale, gas field project off central Vietnam arose as a Chinese survey ship remained in Vietnam's exclusive economic zone this week, the third such encroachment over the past two months.

Yesterday afternoon, Chinese government-owned Haiyang Dizhi 8 was anchored some 360km from the southern city of Vung Tau, according to vessel tracking website Marine Traffic.

Escorted by the Chinese coast guard, it has surveyed the area, triggering a demand from Hanoi for Beijing to immediately remove its vessels.

Vietnamese foreign ministry spokesman Le Thi Thu Hang on Thursday condemned China's actions as illegal, saying the waters in question are "entirely within the sovereignty and jurisdiction of Vietnam". She said the Blue Whale project was continuing as planned.

It consists of an offshore platform, a pipeline, a gas treatment plant on the mainland and pipelines linking third-party plants to generate power. Singapore's Sembcorp Industries is among the firms involved in a gas-fired power plant in the central Quang Ngai province linked to the project.

When fully up and running, the Blue Whale project is expected to provide US$20 billion (S$27.5 billion) in revenue for Hanoi and supply enough power to cover 10 per cent of Vietnam's current demand.

China claims almost the entire oil-rich South China Sea through a vaguely defined "nine-dash line", which overlaps the claims of the Philippines, Vietnam, Malaysia, Brunei, as well as Taiwan.

It has reclaimed and militarised disputed islands, while engaging in a discussion of more than a decade with Asean to draw up a code of conduct to manage territorial disputes.

Beijing has repeatedly tried to block companies from non-littoral states from taking part in oil exploration, and proposed that the final code of conduct include a clause which states that marine economic activity "shall not be conducted in cooperation with companies from countries outside the region".

In 2017, Hanoi scrapped an oil-drilling project licensed to PetroVietnam, Spain's Repsol and United Arab Emirates' Mubadala Development, under Chinese pressure. Less than a year later, it cancelled another project licensed to Repsol some 400km from its southern coast over the same concerns.

This year, oil drilling activities licensed to Russia's Rosneft 370km south-east of Vietnam again triggered opposition from Beijing, which sent Haiyang Dizhi 8 with escorts to Vanguard Bank on the western edge of the Spratly Islands. Vietnam opted to extend the oil rig's operation.

Dwarfed by China's naval prowess, Vietnam has opted to flex its diplomatic muscles instead. At the July meeting involving the foreign ministers of Asean and China, Vietnam's Foreign Minister Pham Binh Minh called out China's actions for eroding trust and causing instability.

During the visit by Malaysian Prime Minister Mahathir Mohamed to Hanoi last month, both sides issued a joint statement that, among other things, "expressed serious concerns over recent developments in the South China Sea".

Vietnam and other Asean states took part in the inaugural Asean-US Maritime Exercise this month held mostly in waters off the southernmost Ca Mau province. The drills helped Asean's navies search and seize suspicious boats.

A version of this article appeared in the print edition of The Straits Times on September 14, 2019, with the headline 'Energy project: Hanoi seeks to push ahead amid China pressure'. Print Edition | Subscribe