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Vietnam Says China Backing Down In Oil Rig Dispute
Submitted by Andy Tully via OilPrice.com,
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.
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.
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The China National Petroleum Corp. said the operation was ending now that the rig had found “signs of oil and gas.”
Call it a hunch but $50 bucks says they'll be back...
My gut reaction is that there isn't near as much easily recoverable oil and gas there to be economically feasable.
China and Vietnam have a very long history (see wiki). China is much larger than Vietnam, so they were not likely worried about a direct military confrontation. That said, most Vietnamese do not forget their long history of being shit upon by China, so the Vietnamese leadership were likely very uncomfortable straddling the fence if they are pro-Chinese. The Vietnamese economy does huge business with China, the northern border has the expected mix of Chinese and Vietnamese ancestry, and generally both would benefit vastly more from continued trade than conflict.
This situation is best resolved without fighting with both leadership camps saving face. Let's hope it stays that way.
Regards,
Cooter
Then why did China do it in the first place?
Territorial claims.
You always start with the soft targets on the 9 dotted line first...
http://en.wikipedia.org/wiki/Nine-dotted_line#mediaviewer/File:9_dotted_...
China talks tough but there is no way the Red Leaders will risk war ... and their overseas RE holdings, bank accounts, etc over this. It's done more "for show" purposes for their own people making it look AS IF they are tough.
No oil there
"...why do it in the first place?"
Underwater current tests, perhaps.
Now completed (so they can go ahead with reclaiming land to build a military base in that "atoll"...) and therefore retreated (eh, backed down !)
And China just cut a huge deal with Russia for oil and gas...trying times for China and Russia--going to need every bit of cooperation from regional subordinates.
Even if "Veic nom" produces the oil and gas they will not sell it regionally for shit stained Western toilet paper.
Putin seems to be thinking much more geostrategically than the Chinese leadership. Wouldn't surprised me if behind closed doors he urged them strongly to back off in the interests of building the "de-dollarization alliance".
After the Vietnam War about +5 years after the war, Vietnam went into Cambodia to take out Pol Pot. China attacked Vietnam and China got it's ass kicked by the Vietnamese milita.
" China got it's ass kicked by the Vietnamese milita"
According to who? Vietnam? lol. China achieved all goals it set out for. Restoring the traditional borders, reclaiming the islands. Pretty sure vietnam lost that one.
I value your opinion, therefore, if I may ask, what is your take-away from this action by China?
This seems positive....Vietnam should just keep quiet and respect China's withdrawl. If they try to make China look weak (which it isn't) then China may feel forced to flex again.
While I am not Asian, it is my impression that men in Asian cultures often have to feel as though they "won" these sorts of things. Optics are extremely important. As long as both sides can confidently exercise bravado in public, it will probably settle down.
What gets dangerous is when there is no "optical" way to defuse the situation and both of em go at it at great personal expense.
As I said, both sides benefit enormously from trade with each other, but China has its own problems that initiated the sequence from which Vietnam leadership did not have much room to back down from (especially given the protests/problems in Vietnam related to the news).
Hopefully they are done exploring as the well came back "not worth a pinch of coon shit".
Regards,
Cooter
IMHO that's way too fast to have drilled for gas. Maybe a shallow well but not a deep exploratory well looking for significant deposits. If it were shallow then geophysical imaging would have made it fairly obvious.
Sure...
The Chinese just walked away from a viable find.
China's smart move . . . buy resources, don't fight wars for them. Invest in joint projects. Put those US dollars you have to good use. Build a reputation for win-win so that people welcome partnership deals with you.
Fighting wars . . and then holding on to territory is very expensive. Drop the old school thinking.
So they came to this conclusion last week?
"Drop the old school thinking... "
There are no conclusion, because this was no territorial dispute (not with Vietnam), only strategic play.
I would look to the long term security for the transport route...China is smart so you say...and they did sign the huge deal with Russia, but they'd not become dependent on Russia (for now, buddy I support you, and soon you'd depend on me for cash as sanctions start to take toll, no?) so the buy-and-deal strategy for resources acquisitions will continue...making it more urgently to secure the seaway.
Take three steps back, ponder who is/are helping China, since day one of CCP.
And now the dumbed-down un-innovative population (slavples) with "s.m.a.r.t." leadership to lead in the NWO agenda !!!
Thats funny, we just call it a dry hole in Oklahoma.
LMAO!
You sir are probably correct ... I am certain they didn't walk away from a world class hydrocarbon despoit! If it was giant class or better (like there are any left - a joke in and of itself) they would probably go to war over it (near-ology and all)l.
That said, it is possible the geology in the area was piss poor to begin with ... but that would be a geopolitical discussion.
Regards,
Cooter
And somehow it doesn't occur to oilprice.com that they finished their exploratory look and found nothing.
I'd wait until their rig was over the horizon and sneak in for a little look-see at the well head.
Maybe hook it with my anchor pull it off and see what bubbles up...
Please don't give us logical explanations.
OilPrice is a retail investor trade rag for the unwashed masses to think they know enough about energy to squander their inheritance/savings. I almost view them as a contrary indicator in some ways. That said, occasionally they do post stuff of value.
I follow them because I don't have access to a better quality news outlet for petro-political developments.
If I am missing one, please share because I followed TOD before OP and nothing I have found comes close.
For shits and giggles, my predictions are:
I am looking on a timeline commensurate with my remaining years on the year (~30).
Regards,
Cooter
Cooter:
Which books /blogs do you follow regarding oil assets?
Thank you in advance.
Larry D.
Depends on your background and reading habits.
By far the most informative book series is by Penwell publishing and is a "non-technical" series. They are narrative but are probably par with college level reading. It covers oil/gas exploration, nat gas pipelines, refining, petro chemicals, and so on. Really top notch stuff and probably the single best resource if you are willing to write a check and actually read.
Oil 101 by Downey is your go-to source every time you hear about something but need more info. It has crazy amounts of disparate factual goodies.
I read TheOilDrum for the longest time, but they shut down. HeadingOut (one of the posters) still posts stuff that is very informative at his new blog (he is a univeristy of Missouri professor IIRC). GailTheActuary (of the Automatic Earth) also posts pretty good stuff. Robert Rapier also posted some on TOD and he blogs over at RSquaredEnergy. He has a book called Power Plays that has a lot of solid factual content and I feel is reasonably well balanced (he has a hydro-carbon background but is working in renewables now).
The Thorium MSR stuff is spotty as I have seen what appeared to be solid sources go up and down over time. A google talk on the subject is still around by an author who is trying to commercialize the technology (its super regulated - wont ever happen). That said, it is the only energy tech I have seen that has enough zeros to work for the very long haul (and is thus worth the investment in my mind).
All that said, TOD was the best community for oil/energy developments and the comments section never failed to surprise on occasion, despite all my reading elsewhere.
I didn't bother to dig up links, but google should help you find all that. If not I am around and feel free to ask another time. Bedtime soon ...
Regards,
Cooter
Thank you kindly Cooter. Thank you very much.
Larry
A unified Asian free trade zone with their own banking system could rule the world for the next century. China seems to be p*ssing that chance away.
I wholeheartedly agree.
Unfortunately they have been cursed by taking lessons from us...
Wrong perspective; start by assuming you own a significant portion of the current system (i.e. you are "elite") and then ask yourself how to get richer. That is what will always happen. Systems that "work for the people" are fairy tale stuff.
China has just as much motivation to play along as anyone else with the caveat our elites are spoiled children who are simply too greedy and stupid.
Regards,
Cooter
Indeed, CC.
The other perspective may be to study how CCP came into place.
the entire operation was just a part of china's policy of testing the waters, so to speak, of usa commitment to the area and the level of influence it has in the region.
It all started because China got tired of Putin get all the buzz
In other news Bob says there are no tanks in Bagdad and they are beating the filthy dogs back now.
China always runs away from the Vietnamese eventually.
Nobody should mess with the Vietnamese, especially the Chinamen who can't fight worth a damn.
Then again it might be an intel move, China and Vietnam colluding to see what the west offers and comparing notes.
Why can't we be friends?