South China Sea: Vietnam halts drilling after 'China threats'

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South China Sea: Vietnam halts drilling after 'China threats'
By Bill Hayton
BBC News
24 July 2017

http://www.bbc.com/news/world-asia-40701121

Vietnam has reportedly terminated a gas-drilling expedition in a disputed area of the South China Sea, following strong threats from China.
A source in the south-east Asian oil industry has told the BBC that the company behind the drilling, Repsol of Spain, was ordered to leave the area.
It comes only days after it had confirmed the existence of a major gas field.

Those reports have been corroborated by a Vietnamese diplomatic source.

According to the industry source, Repsol executives were told last week by the government in Hanoi that China had threatened to attack Vietnamese bases in the Spratly Islands if the drilling did not stop.

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Emptiness of US rhetoric has been exposed by China bringing Vietnam to heel
Washington failed to back up words with action after Beijing pressured Hanoi into abandoning South China Sea oil drilling project

PUBLISHED : Sunday, 15 April, 2018, 6:03pm
UPDATED : Sunday, 15 April, 2018, 9:56pm
COMMENTS: 76


http://www.scmp.com/news/china/diplomacy-defence/article/2141640/emptiness-us-rhetoric-has-been-exposed-china-bringing

In March, Vietnam’s state petroleum firm PetroVietnam withdrew its consent for Spanish energy firm Repsol to move ahead with a drilling project in the South China Sea. According to a report by Bill Hayton, a journalist and South China Sea analyst, the move could cost Repsol as much as US$200 million in sunk investment costs.

The Vietnamese decision was not made freely by the government. For months, China has been working to coerce the government of Vietnam and deprive it of the right to freely exploit its exclusive economic zone as should be its right under international law.

Vietnam ‘scraps South China Sea oil drilling project under pressure from Beijing’

Last summer, in July, executives from Repsol said that China threatened to initiate a military conflict with Vietnam in the Spratly Islands if the Spanish firm moved ahead with its planned drilling activities in a separate oil drilling block. PetroVietnam’s decision in March followed similar coercion.

So far, several weeks out from the Vietnamese decision, China appears to have entirely got away with bullying a littoral South China Sea state from accessing its own hydrocarbon resources. The development underlines the ultimately shallow assurances the United States has been able to provide to regional states.

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But for all this military activity and for all the rhetorical support from Washington and other democratic Asian capitals in recent months, none of these countries made any grievances known as Vietnam was deprived of access to its South China Sea resources under the threat of force.

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By failing to show up as Vietnam was coerced into a corner, Washington ultimately failed to live up to supporting the values that it claims to hold with regard to the future of the regional security architecture in Asia. The next time Chinese decision-makers seek to authorise the coercion of a Southeast Asian claimant state in the South China Sea, they’ll remember that.

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Vietnam scraps South China Sea oil drilling project under pressure from Beijing - BBC
Reuters Staff

https://www.reuters.com/article/southchinasea-vietnam/vietnam-scraps-south-china-sea-oil-drilling-project-under-pressure-from-beijing-bbc-idUSL3N1R451F

HANOI, March 22 (Reuters) - Vietnam’s state oil firm 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 on Friday.

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 for commercial drilling.

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

The cancellation could cost Repsol and its partners $200 million in sunk investment, according to the BBC.

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Repsol asks Vietnam for compensation after drilling project halted
Reuters Staff
MAY 4, 2018

https://www.reuters.com/article/us-repsol-results-vietnam/repsol-asks-vietnam-for-compensation-after-drilling-project-halted-idUSKBN1I517E

MADRID (Reuters) - Spanish oil major Repsol is in talks with Vietnam’s state oil company and national authorities over compensation for the suspension of an oil drilling project in the South China Sea, its chief financial officer said on Friday.

Vietnam halted the project in the “Red Emperor” block off its southeastern coast, which is licensed to Repsol, after coming under pressure from China, sources said in March.

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Maybank Research cautious on Yinson over Vietnam Red Emperor contract
 Published Mar 26, 2018    The Star Online   

https://oglinks.news/article/694779/maybank-research-cautious-on-yinson-over-vietnam-red-emperor-contract?t=South+East+Asia&fieldname=regionids&fieldvalue=13
   
KUALA LUMPUR: Maybank Investment Bank Research is cautious on Yinson Holdings over the latest development in the Red Emperor or Ca Rong Do (CRD) project offshore Vietnam.

It was reported that Vietnam halted the oil drilling project in the Red Emperor block off its southeastern coast licensed to Spanish energy firm Repsol following pressure from China.

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

Hence, Repsol could call off the US$1bil 10+five-year CRD floating production storage and offloading (FPSO) FPSO charter, awarded to Yinson-PTSC last year.

Maybank Research said should this happen, Yinson will incur: (i) the loss of income from FY21 and (ii) a 24 sen a share impact to the  target price but it is entitled to a full recovery of cost for the FPSO currently under refurbishment.

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Before China interfered


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Repsol to Revive Ca Rong Do off Vietnam
Friday 8 July 2016

https://subseaintel.com/news/1367

Repsol is breathing fresh life into its Ca Rong Do (Red Emperor) oil and gas project in Vietnam after receiving updated contractor submissions and having reset the first oil date.

The project has been in hibernation for the last six months given the prevailing tough economic conditions.

However, sources said that major services providers have now re-submitted their proposals and these are being evaluated by the Spanish operator. “Repsol has decided to activate the project again,” said a well-placed source, adding that it would bring a much-needed boost to the oil and gas sector in Vietnam.

The proposed date for first oil has been reset to 2019, from the previous target of the third quarter of 2018.

The project’s development concept has not changed, added the source, which means a tension-leg wellhead platform will be tied back to a floating production, storage and offloading vessel. Three companies are understood to be competing for the leased FPSO — Yinson Holdings of Malaysia, UK-listed Petrofac and Bumi Armada, also of Malaysia.

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The company has indicated Ca Rong Do is a “quite strong” project, and it had modelled the project “perfectly well” at $55 per barrel, $65 per barrel and $75 per barrel.

Its most recent guidance was that Ca Rong Do sits within “an extensive pipeline of organic opportunities” and is one of the projects being progressed in 2016.

Repsol has said its net investment devoted to the project between 2015 and 2019 is $630 million, meaning a total commitment of just over $1.1 billion for the joint venture.

The co-owners of Block 07-03 are operator Repsol on 55%, Pearl Energy (Mubadala Petroleum) on 25%, PetroVietnam E&P on 15% and Pan Pacific Petroleum on 5%.

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https://www.repsol.com/en/repsol-worldwide/asia/vietnam/index.cshtml

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South China Sea: Tensions erupt as Vietnam extend oil rig on Vanguard Bank
VIETNAM have reportedly extended their work schedule at an oil rig on Vanguard Bank in the South China Sea amid rising tensions with Beijing.
By CLAIRE ANDERSON
PUBLISHED: 00:49, Sat, Jul 27, 2019 | UPDATED: 01:03, Sat, Jul 27, 2019

https://www.express.co.uk/news/world/1158451/south-china-sea-news-world-war-3-latest-vietnam-beijing-xi-jinping-hanoi-vanguard-bank

China has confronted Vietnam’s drilling within the disputed waters and attempted to cease the activity, the South China Morning Post (SCMP) reported. But Vietnam’s foreign ministry have insisted they will protect its sovereign rights between the stand-off with Beijing which claims the entire sea under its sovereignty. The Southern Vietnam Maritime Safety Assurance Corporation confirmed the Hakuryu-5 rig’s extension from July 30 to September 15.

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China has sent vessels to the area to block Vietnam’s work, according to analysts.

Maritime expert, Collin Koh, believes Chinese ships will delay Hakuryu-5’s extended operations.

Mr Koh told SCMP: “But the most important signal Vietnam wants to send is definitely that it’s not going to back down.

“Ever since the Repsol episode, Hanoi has resolved not to back down any more lest Beijing continues to hamper legitimate Vietnamese energy work in its own exclusive economic zone.

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“And the other factor, I believe, is in the mind of Vietnamese policy elites and it is that doing so not only shows resolve to the domestic audience, now that this stand-off has been publicly reported after a media ban was lifted, but it also helps to draw international attention and help.”

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