“Stand-off at Vanguard Bank: A Test of Vietnam – China Relations” by Ha Hoang Hop and Lye Liang Fook

2019/62, 22 July 2019

According to the Asia Maritime Transparency Initiative, a Chinese coast guard vessel, the Haijing 35111, has since 16 June been patrolling an area about 190 nautical miles off the coast of southeastern Vietnam that is adjacent to the oil and gas Block 06-01, that is situated to the northwest of Vanguard Bank on Vietnam’s continental shelf. The block is key to the Nam Con Son project which provides up to 10 percent of Vietnam’s total energy needs. In May 2019, Russian Rosneft contracted the Hakuryu-5, a rig owned by Japan Drilling Company, to drill a new production well in 06-01 at a second gas field called Lan Do. There were two previous incidents in July 2017 and March 2018 where Chinese threats forced Vietnam to stop drilling in nearby oil and gas blocks by Spain’s Repsol. But in the most recent case, Rosneft went ahead with the drilling at Lan Do and at another field, Phong Lan Dai, in Block 06-01. Haijing 35111 was reported to have been operating in a threatening and intimidating manner near Vietnamese vessel that were servicing the Japanese rig.

China appears to have stepped up its presence in the area. On July 3, the Haiyang Dizhi 8, a survey vessel owned by the government-run survey corporation, began surveying a large swathe of seabed northeast of Block 06-01. The ship was apparently undertaking an oil and gas survey across two blocks, Riji 03 and Riji 27, which are well within Vietnam’s EEZ. China declared these and seven other blocks off the coast of Vietnam open for foreign bidding in 2012, though there were no takers. The survey’s timing does not appear to be a coincidence. More likely, it is intended to send a message to Vietnam that it should refrain from allowing Rosneft to conduct further drilling in Block 06-01.

In a show of force, at least four Chinese coast guard vessels have reportedly been dispatched to protect the Haiyang Dizhi 8. The Haijing 37111 and two other Chinese Coast Guard ships have accompanied the Haiyang Dizhi 8 since July 3. In addition, the Haijing 3901, one of the world’s largest law enforcement vessels, was also on the scene. Not to be outdone, Vietnam has responded by sending its own law enforcement vessels to shadow the Haiyang Dizhi 8. Two Vietnamese Coast Guard vessels, KN 468 and KN 472, have been trailing the survey ship since July 4. The situations at both Block 06-01 and around China’s ongoing oil and gas survey appear to be tense. There are reports of ramming and aggressive behavior between the Chinese and Vietnamese vessels present in the area. There is a view that China’s actions off Vietnam’s coast since June indicate that Beijing is increasingly willing to employ coercion and the threat of force to block oil and gas operations by its neighbors, even while China simultaneously pursues its own energy exploration in disputed waters.

In the midst of the stand-off at sea, Vietnam’s National Assembly Chairwoman Nguyen Thi Kim Ngan visited China from 8 to 12 July. Her visit, which saw her calling on three top Chinese leaders of the Political Bureau Standing Committee, i.e. President Xi Jinping, Chairman of the National People’s Congress Li Zhanshu and Chairman of the Chinese People’s Political Consultative Conference Wang Yang, provided an occasion for both sides to take a step back and view their relations from a higher standpoint. President Xi was reported to have called on both countries to “lift their ties to a new high from a new starting point”. And with regard to maritime issues, he called on both sides to “safeguard peace and stability at sea with concrete actions”.
At the moment, the stand-off near Block 06-01 does not appear to be approaching the level of the 2014 Haiyang Shiyou 981 incident. Nevertheless, both sides appear determined to defend their claims. On 11 Jul, when Nguyen Thi Kim Ngan was in Beijing, Vietnam’s Prime Minister Nguyen Xuan Phuc paid a visit to the Vietnam Coast Guard High Command to encourage them to weather every difficulty so as to fulfil all their tasks in an apparent reference to the standoff at sea between the two countries. On 16 July, the Ministry of Foreign Affairs in Hanoi issued its first response to questions about the situation near Block 06-01 by reiterating Vietnam’s sovereign rights over its waters and seabed and noted that the relevant Vietnamese authorities were exercising those rights. In response, on 17 July, the Ministry of Foreign Affairs in Beijing requested Vietnam to respect China’s sovereignty and jurisdictional right as the area was within China nine-dash line claim. The war on words has continued with Vietnam’s foreign ministry calling on China on 19 July to immediately end the violations and withdraw all vessels from Vietnamese waters. The US Department of State joined the fray by calling on China to stop its “repeated provocative actions aimed at the offshore oil and gas development of other claimant states” in the South China Sea.  

It is possible that an accidental collision in the area could lead to an escalation. At the same time, it is also possible that both sides would want to exercise restraint to avoid drawing undue attention on the South China Sea issue. This is because China and Vietnam will celebrate the 70th anniversary of the establishment of diplomatic relations in 2020. China would also want to have good and stable relations with Vietnam as the latter will be the chair of ASEAN next year. Moreover, with the continued uncertainty over US-China relations, China will most likely want to avoid opening up another troubled front in its ties with ASEAN in general and with Vietnam in particular.

Dr Ha Hoang Hop and Mr Lye Liang Fook are Senior Visiting Fellow and Senior Fellow respectively at ISEAS – Yusof Ishak Institute.

The facts and views expressed are solely that of the author/authors and do not necessarily reflect that of ISEAS – Yusof Ishak Institute.  No part of this publication may be reproduced in any form without permission.