HANOI IS PROCEEDING WITH JOINT DRILLING VENTURES WITH JAPANESE FIRMS IN THE DISPUTED WATERWAY DESPITE THE FAILURE OF SIMILAR PROJECTS WITH OTHER COUNTRIES
BUT ANALYSTS SAY CHINA IS LIKELY TO TEST VIETNAM THROUGH MARITIME PROVOCATIONS IF THE ENERGY VENTURES GO AHEAD
When the Japanese energy firm Inpex in November settled a four-year legal battle against a Singaporean firm to retain its oil and gas concession with Vietnam in the South China Sea, it won the rights to drill in some of the world’s most fraught offshore fields. With field development plans already approved by the Vietnamese government for Blocks 05-1B and 05-1C, production appears to be close at hand.
Inpex is not going into the venture blind. A joint project between the Vietnamese state energy company PetroVietnam and the Russian giant Rosneft at a nearby field collapsed in July following a year of on-and-off stand-offs between the drilling rigs and Chinese maritime forces. Operations in a nearby field were halted after a deal between PetroVietnam and the Spanish firm Repsol was cancelled in 2017, allegedly under Chinese threats of military attacks. The following year, Repsol pulled out of its final concession with PetroVietnam.
But while Vietnamese officials know well the risks that come with drilling in the South China Sea, there is hope in Hanoi that their Japanese business venture will succeed.