Oil Rig

China Threatens Vietnam Over Gas Drilling

Vietnam has reportedly terminated a gas-drilling expedition in a disputed area of the South China Sea, following high threats from China.

A source in the southeast Asian oil industry has advised the BBC that the company behind the drilling, Repsol of Spain, was commanded to go away from the area.

It comes only days after it had proved the presence of a major gas field. A Vietnamese diplomatic source has confirmed the reports.

According to the industry source, Repsol executives were told last week by the government in Hanoi that China had warned to strike Vietnamese bases in the Spratly Islands if the drilling did not stop.
While the Vietnamese government has let the area, which it calls Block 136-03. Beijing has sold the same drilling rights in the area, known in China as Wan-an Bei 21, to a Hong Kong-listed company called Brightoil.

General Fan Changlong, cut short an official visit to Vietnam and a friendship meeting at the China-Vietnam border was abolished, days before the drilling began.

Last week, a tension between the two nations reached the critical level when Beijing said it would hit Vietnam’s bases in the Spratly Islands.

But that opposition did not stand up to military threats from Beijing, with Vietnamese authorities ordering Talisman-Vietnam to abandon the area just days after the company, which has paid some $300 million in improving the site, confirmed the existence of a major gas field.