Despite China's objections, India eyes oil exploration in South China Sea

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SME Times News Bureau | 04 Aug, 2012
Unfazed by China's objections, India is re-evaluating a Vietnamese offer for oil exploration in the South China Sea and will go ahead if ONGC Videsh Limted, the overseas arm of the Indian oil major, finds a viable partner.

In June, OVL conveyed to Vietnam that it can't meet the June 15 deadline for exploring in oil Block 128 offered by Hanoi as it could not find a suitable partner which had made the project unviable. At that time, OVL had cited techno-commercial reasons for pulling out of Block 128, saying it unwilling to participate in the block which was not economically viable.

Vietnam subsequently extended the deadline by another two years.

India is now understood to be taking a re-look at the Vietnamese offer and OVL is actively scouting for a partner to jointly engage in exploration. The decision came after Hanoi offered additional data that could help make future exploration economically viable.

India's decision to continue with the exploration in the contested territory has not gone down well with Beijing, which claims the entire South China Sea.

There has been no official comment from Beijing, but Global Times, a Chinese daily known to reflect hardline nationalist thinking in China, had a word of warning for India. India and Vietnam should be given a "strong response" if they insist on exploring oil and gas in waters claimed by China, it said in an article this week.

"China must first insist on exerting political pressure over both India and Vietnam, warning them that their joint exploration in the South China Sea are illegal and violate China's sovereignty," Global Times said.

"If they conduct oil and gas exploration in waters under China's sovereignty, China should give a strong response," the paper added.

The daily said Tuesday that its reporter wrote the story based on an interview with Su Hao, director of the Asia-Pacific Research Centre at the China Foreign Affairs University.

Referring to OVL's decision, the daily said: "Such a move is obviously a complete about-turn in India's policy as Indian officials had said in May that the ONGC had decided to return Block 128 to Vietnam since exploration there wasn't commercially feasible."

"Vietnam's renewed offer to India came after the China National Offshore Oil Corp (CNOOC) decided to offer nine blocks in the South China Sea for joint exploration with foreign companies, including Block 128," it added.

Against the backdrop of growing Chinese assertiveness in the Southeast Asia, the foreign ministers of India and Indonesia met July 27 in New Delhi and discussed, among other tensions, the South China Sea and backed freedom of navigation and regional peace.

The South China Sea has been a point of tension between China and ASEAN countries over territorial disputes. India has consistently supported the freedom of navigation and access to resources in the region in accordance with the principles of international law.

China says it controls much of the South China Sea, but Brunei, Malaysia, Taiwan, the Philippines and Vietnam all claim portions.