Monday, July 24, 2017

China Threatens Force to Stop Vietnam’s Oil Exploration in the Spratly Islands

Background Briefing:
China Threatens Force to Stop
Vietnam’s Oil Exploration in the
Spratly Islands
Carlyle A. Thayer
July 24, 2017
[client name deleted]
The BBC has reported ( and
Vietnamese sources in Hanoi have confirmed, that Vietnam has ceased drilling in block
136-03 as a result of pressure from China. We urgently request your assessment.
ANSWER: The BBC report that Vietnamese officials told Repsol executives that China
threatened to attack Vietnamese bases in the South China Sea if the drilling did not
stop is a marked and alarming step up of Chinese assertiveness. It is a major escalation
in China’s posture.
Vietnam’s current pause in oil exploration in block 136-03 has long term ramifications.
Foreign oil companies if they assessed the risk as serious could demand protection
from Vietnam or “cut bait and leave.” If Vietnam stops exploration permanently this
would have long terms implications for present oil contracts with foreign companies
and more significantly, Vietnam’s future energy security.
China’s threat raises a nightmare scenario for Vietnam’s leaders because any attack
on a Vietnamese-occupied feature in the South China Sea would result is a massive
eruption of anti-Chinese sentiment in Vietnam. This could seriously undermine the
political authority of the current leadership. In the midst of the HD 981 crisis in 2014,
for example, sixty-one retired senior Vietnamese officials called on their leadership to
take legal action against China, to exit China’s orbit (thoat Trung) and to abandon the
policy of three no’s (no foreign alliances, no foreign bases, and no use of Vietnam to
harm the interests of a third country).
Any Chinese attack on Vietnam would send off alarm bells all over the region. ASEAN
would be split about how to respond. Capitulationists like Duterte could seriously
impair ASEAN consensus.
Any Chinese attack on Vietnam would be like throwing down the gauntlet to the
United States, Japan and other maritime powers. Do they really want to go to war with
Chia to protect Vietnam’s oil industry or over a few little rocks in the South China Sea?
Suggested citation: Carlyle A. Thayer, “China Threatens Force to Stop Vietnam’s Oil
Exploration in the Spratly Islands” Thayer Consultancy Background Brief, July 24, 2017.
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