Sat, Mar 24, 2018 - Page 6 News List

Vietnam scraps oil drilling project due to Beijing: report

Reuters, HANOI

Vietnam’s state oil firm Vietnam Oil and Gas Group (PetroVietnam) has ordered Spanish energy firm Repsol to suspend its “Red Emperor” project off the country’s southeastern coast following pressure from China, the BBC reported yesterday.

It would be the second time in less than a year that Vietnam has had to cancel a major oil development in the South China Sea under pressure from China.

The move comes as Repsol was making final preparations to begin commercial drilling.

A rig, the Ensco 8504, was on Thursday scheduled to depart from Singapore for the drill site, the report said, citing an unnamed energy industry source.

The cancelation could cost Repsol and its partners US$200 million in lost investment, the BBC said.

Asked at a regular briefing if China had pressed either Vietnam or Repsol, Chinese Ministry of Foreign Affairs spokeswoman Hua Chunying (華春瑩) said she did not know where such news had come from, but did not elaborate.

“We hope the relevant sides can work together to maintain the hard-earned positive situation in the South China Sea,” she said.

Red Emperor, known in Vietnamese as the Ca Rong Do field, is part of Block 07/03 in the Nam Con Son basin, 440km off the coast of Vietnam’s southern city of Vung Tau.

The block lies near the U-shaped “nine-dash-line” that marks the vast area that China claims in the sea and overlaps what it has said are its own oil concessions.

Taiwan also has a competing claim for the area.

The field can produce 25,000 to 30,000 barrels of oil and 60 million cubic meters of natural gas per day, Vietnamese news provider reported last month.

Repsol last year spent about 33 million euros (US$40.7 million) on exploration in Vietnam, the company’s profit and loss statement for last year said.

The Red Emperor site is considered by Repsol’s top management as one of the company’s future growth projects.

Repsol, which has a 51.75 percent stake in the project, signed a 384 million euro rental contract for a rig to start work on a Vietnamese site next year, the statement said.

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