HONG KONG (Thomson Financial) - China has warned US oil giant ExxonMobil to
drop an exploration deal in the seas off Vietnam and said the project could
threaten any future mainland contracts, a Hong Kong newspaper reported Sunday.
Diplomats in Washington have contacted senior figures in the world's largest
oil firm to protest the deal, which they say could be a breach of Chinese
sovereignty, the Sunday Morning Post reported citing unnamed sources close to
the US firm.
"If it was simply a legal question it would be easy," one of the sources
told the newspaper.
"Vietnam would probably prevail in international mediation. But it's
political, too. China's concerns make the situation much more complicated for a
company like Exxon... China is a very important player in the international oil
industry."
The dispute involves a preliminary co-operation agreement between state oil
firm PetroVietnam and ExxonMobil covering exploration in the South China Sea off
Vietnam's south and central coasts, the report said.
The Chinese protests are based on Beijing's historical claim to huge swathes
of the South China Sea, the report said.
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."
The report quoted Vietnamese Foreign Ministry spokesman Le Dung saying it
needed to be "clearly asserted" that Hanoi's dealings with foreign oil partners
fell entirely within Vietnam's legal rights and sovereignty.
TFN.newsdesk@thomson.com
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