CNOOC, China's top offshore oil producer, yesterday said it has floated a tender last month inviting oil companies to bid for joint development of nine hydrocarbon blocks in the western part of the South China Sea.
The Chinese move was immediately opposed by Vietnam, which called it illegal, since the tendered blocks overlap its territorial waters where it had issued licences to overseas oil companies like US oil giant ExxonMobil, Russia's Gazprom and India's OVL.
These oil majors are already drilling and exploring in the awarded blocks in partnership with Vietnam's state-owned oil company PetroVietnam.
Vietnam has already asked overseas oil companies not to bid for the Chinese tender, and it is unlikely that any company would want to take a risk until both countries come to an agreement.
OVL has two offshore deepwater operating blocks in Vietnam - Block 0.61 and Block 128. Both these blocks, licensed in 1998 and 2006, are 45 per cent and 100 per cent owned by OVL, respectively.