SOUTH CHINA SEA TENSION

BLOOMBERG - Vietnam's state-owned oil company said South China Sea tensions will hurt oil and gas exploration and efforts to attract foreign investment to offshore fields.

The rare comment from Vietnam Oil and Gas Group, also known as PetroVietnam, follows a BBC report that Vietnam ordered Spanish energy company Repsol SA to suspend a project for a second time under pressure from China. Repsol halted exploration off Vietnam's southeast coast last year, Chief Financial Officer Miguel Martinez said in a July 27 earnings call.

"Unpredictable developments are seen continuing in the South China Sea that will impact the company's oil, gas exploration and the efforts to attract foreign companies to invest in offshore open fields," PetroVietnam said in a statement on its website.

Vietnam has become more isolated in pushing back against China's expansive territorial claims as the Philippines moves closer to a deal with Beijing to jointly explore for oil and gas in disputed parts of the South China Sea. Hanoi's leaders have rejected China's claims as a basis for joint development, and have stepped up ties with the U.S., Australia and India to hedge against Beijing's rise.

Territorial tensions between China and Vietnam in the South China Sea are increasing "the risk factor" for companies investing in the contested region, Sandra Oudkirk, the U.S.'s deputy assistant secretary for energy diplomacy, said in an interview in Hanoi last week.

"What we are looking at is the potential chilling effect on other international investors," she said on the sidelines of an energy conference. "The thing investors want more than anything is stability and the assurance or a level of comfort that they will be able to operate their investment in a way that brings back return on their investment."

The objections to exploration in the block in question, which has been subject to exploration activity in the past under Vietnamese authority, underscores China's increasing maritime claims, said Andrew Harwood, research director at Wood Mackenzie Ltd.

"We predict 22 new oil and gas projects, $8.5 billion of capital investment and 28 exploration wells across Indonesia, Malaysia, Brunei, Vietnam and the Philippines could be at risk if China continues to press its defense of its territorial claims," he said.

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Earlier:

2018, March, 5, 11:25:00 SOUTH CHINA SEA OIL REUTERS - Any deal between the Philippines and a Chinese firm to jointly explore for gas in the Reed Bank of the South China Sea will be illegal unless China recognizes the southeast Asian nation’s sovereign rights there, a Philippine judge said on Monday.

2017, November, 13, 10:40:00 SOUTH CHINA CEA CALM Vietnam’s state television said Chinese President Xi Jinping had told Vietnam’s General Secretary Nguyen Phu Trong he wanted to work with Southeast Asian nations on a code of conduct in the sea. China’s Xinhua news agency said China and Vietnam had agreed to properly handle maritime issues and strive to maintain peace and stability.

2017, November, 3, 12:15:00 SOUTH CHINA SEA LNG The South China Sea is a major route for liquefied natural gas (LNG) trade, and in 2016, almost 40% of global LNG trade, or about 4.7 trillion cubic feet (Tcf), passed through the South China Sea.

2017, May, 19, 12:35:00 SOUTH CHINA SEA GAS China's attempt to test marine natural gas hydrates, a future energy source, has turned out to be a success, making it the first country to secure continuous and stable gas supply in marine gas hydrate exploitation, according to the Ministry of Land and Resources.

2017, April, 6, 18:45:00 SOUTH CHINA SEA SOVEREIGNTY China claims almost all of a large stretch of sea between Taiwan, Malaysia, Indonesia, the Philippines, Brunei, Vietnam and Japan. The trouble is, between them, these seven other states all do too.

2017, February, 8, 18:45:00 SOUTH CHINA SEA TALKS China is committed to having talks with the parties directly involved, and in accordance with historical facts and international law to peacefully resolve the issue, and that position will not change, Wang said.

2016, July, 5, 18:15:00 SOUTHEAST ENERGY WAR About $5 trillion in ship-borne trade passes every year though the energy-rich, strategic waters of the South China Sea, where China's territorial claims overlap in parts with Vietnam, the Philippines, Malaysia, Brunei and Taiwan.