Vietnam says China offshore oil auction 'illegal'

Posted at 06/27/2012 1:58 PM | Updated as of 06/28/2012 2:21 AM

HANOI - Vietnam has denounced China's opening of offshore oil blocks to foreign companies in contested areas of the South China Sea as "illegal", as territorial tensions grow between the communist neighbors.

On Saturday, the China National Offshore Oil Corporation announced that nine offshore blocks were available for exploration, and said it was seeking bids from foreign companies.

Vietnam's foreign ministry said in a statement late Tuesday that the blocks "lie entirely within Vietnam's 200-mile exclusive economic zone."

It added: "This is absolutely not a disputed area. (CNOOC's move) is illegal and of no value, seriously violating Vietnam's sovereignty."

It said the bid invitation was "causing tension" in the South China Sea.

The blocks, which cover an area of more than 160,000 square kilometres (64,000 square miles), "are available for international exploration and development cooperation between CNOOC and foreign companies," CNOOC said in a statement.

The tender was "normal business activity", Chinese foreign ministry spokesman Hong Lei told a regular news briefing on Tuesday.

"We hope Vietnam will respect these agreements and avoid taking any action that may complicate the matter," he said.

China and Vietnam are locked in a long-standing territorial dispute over the South China Sea, and frequently trade diplomatic barbs over oil exploration, fishing rights and the Spratly and Paracel Islands, which both countries claim.

Last week, Vietnam angered China by adopting a law which claims sovereignty of the mineral-rich islands, prompting Beijing to summon Vietnam's ambassador to oppose the "illegal and invalid" move.

China says it has sovereign rights to the whole South China Sea, believed to sit atop vast oil and gas deposits. The sea is also claimed in whole or part by Taiwan, Vietnam, Brunei, Malaysia, and the Philippines.

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