English Transcript

Cập nhật 29/07/2008 20:12:00

Two of the world's largest oil companies are taking on China, in a dispute that involves VN and the South China Sea. This week VN's state oil group Petrovietnam announced the resumption of oil exploration with 2 joint venture partners BP and Exxon Mobil.

Beijing has told Exxon Mobil to pull out of the deal, claiming the exploration is in Chinese territorial waters. But Exxon has refused. Observers are now waiting for China's next move, as Claudette Werden reports.

WERDEN: The South China Sea is ringed by VN, The Phillipines, Malaysia, Brunei and China. Each country lays claim and most have fought over some parts of the sea and Spratly Islands which lie in the middle and are thought to contain large oil and gas deposits. In recent years, there's been an escalation of oil exploration and survey activitiy mainly by China and VN with the help of foreign joint venture partners, including 2 of the world's largest oil companies Exxon Mobil and BP. This week Beijing told Exxon to pull out of the deal with PetroVietnam, claiming the activity infringed on Chinese territory... an example of Beijing's bully boy tactics according to leading international energy consultant Dr Fereidun Fesharaki. He suggests it may be an attempt by Beijing to fast track a territorial agreement between China and VN.

FESHARAKI: VN is one of the last bastions left, everything else is closed to the national oil companies who control everthing so they are kind of desperate to get in, the Chinese are trying to scare them off and this all pushes the Vietnamese to some kind of agreement in favour of China.

WERDEN: VN says its dealings fall entirely within the country's sovereign rights. For its part, Exxon Mobil says it hasn't signed any exploration contract in Vietnamese waters but is looking at offshore projects with PetroVietnam. A similar situation occured last year involving BP, it halted plans to conduct exploration work off the southern Vietnamese coast, because of territorial tension. But this week BP announced it was resuming its exploration activity with PetroVietnam. Singapore based oil analyst Victor Shum says both companies are taking a calculated stand in going against Beijing's wishes despite their large investments in China.

SHUM: At this stage it seems prudent on the part of the international majors to stand up to political pressure. If they yield in one country say China and if they go to other countries, lets say Russia or other Latin American countries, every time a country say hey you have to yield to me, then they have to do so I think the western oil majors now have to stand up to more political pressure. This is not the first time for Exxon Mobil, Exxon Mobil remains in a face off with Venezuela, and in the case of BP its involved with a face of with Russia, so this is not new to the international majors.

WERDEN: The increased exploration activity comes at a time of high oil prices and limited supplies. Dr Fereidun Fesharaki says the global oil companies could win more from walking away from any deal with VN. He suggests they may be rewarded by Beijing for bowing to its pressure.

FESHARAKI: BP and Exxon Mobil have millions and millions of dollars of assets in China, Exxon Mobil, joint venture just finished a multi billion dollar refinery petro chemical plant, I think they have at least 2 billion dollars of interest there, in terms of service stations, in terms of the gas interests there, they are really really heavily in there they can't afford to upset the Chinese, they're hope is to go there and say look I want to participate and the Chinese say don't do it and then if they don't do it they expect some goodies from China from China for not doing it.

WERDEN: Dr Kang Wu senior research fellow at the Hawai based East West centre says China has no choice but to officially protest because the area concerned is disputed territory. He says for all sides its the start and not the end of diplomatic maneouvring.

WU: For China, its very important for China to show its position. Maybe both sides which means the international oil companies, Exxon Mobil and the Chinese probably feeling the water to see how to find a solution to this. I'm not sure both sides in the end will be firm on their positions.