India, Vietnam agree to expand oil exploration in South China Sea

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India and Vietnam have agreed to expand oil exploration in the South China Sea, which is a politically sensitive area because of overlapping territorial claims by regional countries including China.

A total of eight agreements — covering energy, defence and education — were signed during the visit to India by General Secretary of the Communist Party of Vietnam, Nguyen Phu Trong.

However, the one that stood out was the deal to expand oil and gas exploration in the South China Sea.

Vietnam offered India seven oil blocks in the South China Sea for offshore exploration — a move that, analysts say, could affect ties with China.

China and Vietnam have overlapping territorial claims in the South China Sea, along with other countries in the region.

Dr P K Ghosh, a senior fellow at the Observer Research Foundation, said: “It is going to have an impact on the Indo-Chinese relationship only if the blocks are in disputed areas. And as far as I know, it may not be in disputed areas.

“So it’s not going to have too much… but for the Vietnamese, it’ll also help in offsetting the pressure which the Chinese have built up over the past few years.”

Despite the political uncertainty, these agreements are considered common in the energy sector.

Lydia Powell, a senior fellow at the Observer Research Foundation, said: “I wouldn’t say this is an exception or anything like that. Many oil prospects around the world are disputed, and it’s very common to have a memorandum of understanding to explore. So it’s not out of the way completely.”

Other agreements signed by Mr Trong and Indian Prime Minister Manmohan Singh included cooperation on transnational crime, science and technology and trade.

From the level of engagement seen between Dr Singh and Mr Trong — including the offer of a US$100 million line of credit for defence purchases — it appears that Vietnam is, as Prime Minister Singh said, an important part of India’s “Look East” policy.

 

 

 

 

Source : Channel News Asia | November 21, 2013

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