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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com

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Vietnam Says China Backing Down In Oil Rig Dispute

A leading Vietnamese military officer said July 16 that China’s decision to remove a huge oil rig from waters claimed by both countries shows that it is backing down in a dispute that has raged since May.

Maj. Gen. Le Ma Luong told PetroTimes, a Vietnamese news outlet, that China was moving the rig because of Vietnam’s “strong reactions” to its presence in the South China Sea near the Paracel Islands. The region is near the Vietnamese coast but Beijing considers it Chinese territory.

In the interview, Luong dismissed a suggestion by the Voice of Vietnam, a state run news agency, that the rig was being moved to protect it from the approaching Typhoon Rammasun. The general called that “just an excuse.”

The China National Petroleum Corp. said the operation was ending now that the rig had found “signs of oil and gas.” It said the company would assess the findings before deciding on its next steps.

Meanwhile, it said, the rig was being moved to undisputed waters near the Qiongdongnan basin.
In Beijing, the Chinese Foreign Ministry said moving the rig should not be interpreted as a retreat from inclement weather or from Vietnam, but simply that it had completed its work of exploring for oil in the area. It also reiterated the assertion that the Paracel Islands are Chinese territory.

Still, China may be motivated by a desire to improve relations with neighboring Vietnam, according to Bonnie Glaser, who specializes in Asian affairs at the Center for Strategic and International Affairs, a Washington think tank. “It could be a face-saving way to end the over two-month-long standoff with Vietnam,” she said.

Related Article: U.S. on Sidelines in South China Sea Standoff

Beijing set up the oil rig, the $1 billion Haiyang Shiyou 981, on May 1 in the disputed waters, triggering violent and often deadly demonstrations in Vietnam. There also were daily confrontations at sea between Vietnamese boats that tried to approach the rig and Chinese coast guard vessels sent to protect it.

Regardless of why China withdrew the rig, the move is likely to ease fears harbored by arge majorities of Asians that Beijing’s overall territorial claims could lead to war, according to a survey by the Pew Research Center in Washington.

The poll was conducted in 11 Asian countries from March – even before China moved the oil rig off Vietnam’s coast – to June. In the Philippines, 93 percent of respondents feared war, 85 percent in Japan shared that concern, and 84 percent in Vietnam felt the same.

Fully 83 percent of those surveyed in South Korea, which enjoys warm commercial relations with China, expressed concern for peace in the region, and that worry was shared by 62 percent of respondents in China itself.

All told, Pew reports, majorities in nine of the 11 countries feared military conflict.

By Andy Tully of Oilprice.com




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