China Warns Some Oil Companies on Work With Vietnam, U.S. Says

China told some international oil and gas companies to halt exploration in offshore areas that Vietnam considers part of its territory, an American government official told the U.S. Congress.

The U.S. is “concerned about tension between China and Vietnam, as both countries seek to tap potential oil and gas deposits that lie beneath the South China Sea,” said Scot Marciel, a deputy assistant secretary of state, in comments yesterday before a U.S. Senate subcommittee posted on the Web site of the Foreign Relations Committee.
Vietnam is among the claimants to all or part of the Spratly Islands in the South China Sea, along with Brunei, China, Malaysia, the Philippines and Taiwan, according to the Central Intelligence Agency. Chinese maps also show an international boundary symbol off the Vietnamese coast, the U.S. agency said, in a profile of China on its Web site.

Any Chinese moves to discourage new drilling in areas where Vietnam has awarded exploration rights may hamper Vietnamese efforts to reverse a recent decline in oil output. Vietnam is opening up new areas to bidding by foreign companies, as a production decline at its biggest oil field pushes the country behind Thailand on regional output tables.

“Starting in the summer of 2007, China told a number of U.S. and foreign oil and gas firms to stop exploration work with Vietnamese partners in the South China Sea or face unspecified consequences in their business dealings with China,” Marciel said, in prepared comments which didn’t name any companies.

Bloomberg