Vietnam has offered to extend India's contract for a gas block in the South China Sea for two more years.
India's OVL had decided to get out of Block 128 in June after their surveys showed that there was little prospect of gas in that area. Their exploration efforts had also hit hurdles due to the hard sea-bed. Given that neighboring block 127 was dry and no foreign partners were forthcoming, OVL decided to exit block 128.
However, with Vietnam running into political problems with China over sovereignty, Hanoi decided to extend India's presence in the area as a hedging tactic. A senior official in OVL said that Vietnam had offered to share new geological data that might point to the presence of substantial amounts of gas in that block. Now, OVL has two years to scout for gas in a place, where competing territorial claims between China and Vietnam might complicate issues for India, despite India's long-standing presence in the region.
In June, Vietnam's parliament restated its territorial claims over Spratly and Paracel islands, which invited spirited protest from China. In response, CNOOC invited overseas oil firms to bid for exploration in nine blocks in western part of South China Sea, which Vietnam also claims. This week, CNOOC officials claimed the bids were "progressing well". However, energy analysts said it would be difficult to attract energy majors in this region because of the disputes.
China is facing increasing opposition from its neighbours in the South China Sea area. For instance, in recent months, the Philippines and Vietnam have all come out against an aggressive China. Taiwan, too, lays claim to the Spratlys. On Monday, Taiwan took the bold step of putting out weather reports of Spratlys Islands in a bid to establish sovereignty.
South-east Asian nations tried to tie China down to a code of conduct during the recent ASEANmeeting. But China, having won over the ASEAN chair, Cambodia, to its side, ensured that no joint statement was issued after the ASEAN meeting, a first in their history.
In 2011, China had warned India and Vietnam following an energy agreement between the latter. "China has indisputable sovereignty over Nansha Islands and the surrounding waters. Our stance and related claims are constant and clear," a Chinese foreign ministry spokesman had said.
India maintains that its presence in the area is "purely commercial", and that sovereignty issues should be settled according to international laws. India has also preferred to go by Vietnam's territorial sovereignty on the blocks 127 and 128.
