China issues fresh warning regarding exploration in South China Sea

Singapore (Platts)--1Nov2011/942 am EDT/1342 GMT

China has issued yet another warning to another oil company regarding oil and gas exploration activities in the disputed South China Sea -- this time directed at US oil major ExxonMobil.

"Any foreign company shall not engage in oil and gas activities in waters under Chinese jurisdiction. This position is clear and consistent," Chinese foreign ministry spokesman Hong Lei said at a regular briefing on Monday.

Late last week, ExxonMobil announced that it had discovered hydrocarbons in August in a well drilled off the coast of central Vietnam.

"We can confirm ExxonMobil Exploration and Production Vietnam Limited drilled its second exploration well offshore Da Nang in August 2011 and encountered hydrocarbons," company spokesman Patrick McGinn said in an email response to questions on the drilling.

ExxonMobil has a license from the Vietnamese government to explore offshore blocks 117, 118 and 119, an area within what Vietnam claims is its 200-mile exclusive economic zone under international maritime law.

The announcement came at a time when leaders in both countries have been trying to reduce tensions and could bring the bitter territorial dispute over the South China Sea back into focus.

Vietnam and China signed a six-point agreement on basic principles to settle maritime issues earlier this month after talks in Beijing by leaders from both countries. In September, Beijing issued a similar warning regarding plans by India's ONGC to explore in two Vietnam-licensed offshore oil blocks in the South China Sea.

"We have always opposed any other country conducting oil and gas exploration and development activities in waters under China's jurisdiction, and hope that the foreign company concerned does not get involved in the South China Sea dispute," Chinese foreign ministry spokeswoman Jiang Yu said then. China, the Philippines, Vietnam, Brunei, Malaysia and Taiwan have overlapping claims to parts of the South China Sea, which is believed to have vast oil and gas deposits. Shipping lanes in the South China Sea are vital for global trade.

--Calvin Lee, calvin_lee@platts.com

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