Vietnam says China offshore oil auction ‘illegal’

Hanoi— Vietnam has denounced China’s opening of offshore oil blocks to foreign companies in contested areas of the South China Sea as “illegal”, as territorial tensions grow between the communist neighbors.

On Saturday, the China National Offshore Oil Corporation announced that nine offshore blocks were available for exploration, and said it was seeking bids from foreign companies.

Vietnam’s foreign ministry said in a statement late Tuesday that the blocks “lie entirely within Vietnam’s 200-mile exclusive economic zone.”

“This is absolutely not a disputed area. (CNOOC’s move) is illegal and of no value, seriously violating Vietnam’s sovereignty,” it said, blaming the bid invitation for “causing tension” in the South China Sea.

On Wednesday, Vietnam’s state-owned oil company, PetroVietnam, called on international companies to boycott the “illegal and wrongful bid invitation,” saying the nine blocks “lie deeply on the continental shelf of Vietnam”.

“PetroVietnam requests international oil companies not to participate in the bidding for the nine blocks,” the company’s general director, Do Van Hau, said at a Wednesday press conference.

The blocks, which cover an area of more than 160,000 square kilometers (64,000 square miles), overlap blocks which PetroVietnam is already in the process of developing with its own foreign partners, Hau said.

“PetroVietnam will send an official letter of protest and request the cancellation of the Chinese tender,” he said, adding they would also “protest until the end” any companies who signed contracts with CNOOC in the area.

On Saturday, CNOOC announced the nine blocks were “available for international exploration and development cooperation between CNOOC and foreign companies.”

The tender was “normal business activity”, Chinese foreign ministry spokesman Hong Lei told a regular news briefing on Tuesday.

“We hope Vietnam will respect these agreements and avoid taking any action that may complicate the matter,” he said.

China and Vietnam are locked in a long-standing territorial dispute over the South China Sea, and frequently trade diplomatic barbs over oil exploration, fishing rights and the Spratly and Paracel Islands, which both countries claim.

Last week, Vietnam angered China by adopting a law which claims sovereignty of the mineral-rich islands, prompting Beijing to summon Vietnam’s ambassador to oppose the “illegal and invalid” move.

China says it has sovereign rights to the whole South China Sea, believed to sit atop vast oil and gas deposits. The sea is also claimed in whole or part by Taiwan, Vietnam, Brunei, Malaysia, and the Philippines.