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Vietnam Defends Conoco Contract To Explore Disputed Waters

April 13, 1996

HANOI, Vietnam (AP) _ Vietnam on Friday defended its bold move of licensing a U.S. oil company to explore waters claimed by China, declaring, ``No one has the right to interfere or obstruct this.″

Vietnam’s state oil company awarded Conoco Inc. the right to explore for oil and gas in an area of the South China Sea about 190 miles from the Vietnamese coast. Vietnam calls the area blocks 133 and 134.

China awarded exploration rights in the same area, which it calls Wan’an Bei 21, to Denver-based Crestone Energy Corp. in 1992.

Vietnam’s move appeared certain to reignite tensions in the South China Sea, where six East Asian governments have jousted repeatedly in recent years over oil rights, shipping rights and ownership of tiny islands and atolls.

It was not clear why Vietnam decided to challenge China now, when bilateral relations are at their best in decades. Only Thursday, a senior Vietnamese official said the situation in the South China Sea was ``better than a few years ago,″ and said there were hopes of drawing China into multilateral talks on the dispute.

``Based on the criteria stated in international laws ... blocks 133 and 134 are located on the continental shelf of Vietnam and are totally subjected to Vietnam’s sovereignty and decision-making rights,″ the Foreign Ministry Press Department said in a written statement.

``Vietnam has the right to explore and exploit the natural resources in these blocks by itself or in cooperation with foreign countries.″

The last part of the statement seemed to indicate willingness to talk with China about jointly exploring the area, but the Foreign Ministry did not immediately elaborate.

A spokesman at Conoco’s Houston headquarters indicated the company will wait for the two governments to resolve their dispute before beginning to search for oil. Crestone has conducted surveys in the area but not drilled.

China’s immediate reaction was stern. Foreign Ministry spokesman Chen Jian said told a news conference in Beijing on Thursday, ``We will never accept any exploration by any country or region in this area that would violate China’s sovereignty.″

Vietnam was equally harsh when China awarded Wan’an Bei 21 to Crestone four years ago. Tensions peaked during the summer of 1994, when Vietnam conducted exploratory drilling in the Vanguard Bank portion of Wan’an Bei 21. Chinese ships reportedly blocked Vietnamese supply boats from reaching the rig, forcing Vietnam to cut the work short.

Since then, the two countries have conducted several rounds of negotiations on their offshore claims. Although no progress has been reported, tensions eased with repeated promises by both governments to seek a peaceful solution.

China claims rights to Wan’an Bei 21 and waters even closer to the Vietnamese shore as an extension of its claim to the Spratly Islands, a far-flung archipelago inhabited only by the armed encampments of competing regional armies.

Vietnam also claims the Spratlys, but says the chain is too distant to affect ownership over Wan’an Bei 21. Malaysia, Taiwan, the Philippines and Brunei claim some or all of the Spratlys but not the Wan’an Bei 21 area.

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