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China Warns Exxon to Drop Exploration Deal with Vietnam - Vietnam Briefing News

July 22 – China is protesting a preliminary agreement that will allow state oil firm PetroVietnam and Exxon Mobil to explore oil in the South China Sea near Vietnam's south and central coast.

Chinese diplomats in Washington warned Exxon that the move is a breach of Chinese sovereignty and could affect its future business interests in the country.

According to Reuters, unnamed sources said that while Exxon Mobil was sure of Vietnam's sovereign rights to the area in question, it could not dismiss China's warnings as out of hand.

China and Vietnam have long had a history of territorial disputes. In 1979, they fought a border war after Vietnam invaded Cambodia and overthrew the Khmer Rouge.

One of the controversial territorial disputes between the two has been the question of sovereignty over the Spratly Islands.The group of islands located in the South China Sea are said to hold large oil and gas reserves and also claimed by neighboring countries Taiwan, Brunei, Malaysia and the Philippines.

Last year, a joint oil and gas exploration project in the Gulf of Tolkin between China and Vietnam halted due to territorial tensions.

Vietnamese Foreign Ministry spokesman Le Dung said that it needed to be clearly asserted that the government’s dealings with foreign oil companies are within its legal rights and sovereignty.