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Updated: April 5, 2012 01:22 IST

South China Sea projects ‘risky for India'

Ananth Krishnan
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India will face “political and economic risks” if its companies continue exploring for oil in blocks off the coast of Vietnam in the disputed South China Sea, a leading government-supported Chinese think-tank has said.

The involvement of Oil and Natural Gas Corporation (ONGC) Videsh in exploration projects in the two blocks will make the dispute “more complicated”, according to Wu Shicun, president of the National Institute for South China Sea Studies. The think-tank is supported by the Foreign Ministry and has been established in this port city in the southern Hainan province, an island in the disputed South China Sea, to advise the government.

Mr. Wu questioned claims by Vietnam, voiced most recently by its Deputy Prime Minister, Nguyen Thien Nhana, during a visit to New Delhi last week, that the two blocks were not part of the dispute because they lay within 200 nautical miles of Vietnam's territory and fell under its claims under the United Nations Convention on the Law of Sea (UNCLOS).

‘Disputed area'

Mr. Wu said “40 per cent” of the two blocks were within the area — denoted in Chinese maps by a U-shaped line — where China held claims over the South China Sea's islands, which are disputed by at least 10 countries.

“So it is a disputed area, not a non-disputed area”, he said. “In any disputed area involving so many claimant states, the involvement of external multinational oil corporations will make the situation even more complicated and poses even more obstacles.”

Mr. Wu, who has served as the Director General of Hainan's Foreign Affairs Office, alleged it was “Vietnam's maritime strategy to try and invite international oil companies and governments to get involved”.

“For the oil company,” he said referring to ONGC Videsh, “there are a lot of political and economic risks. If they do a cost-benefit analysis, they will see more costs than benefits.” The risks, he said, were “mostly economic”. There was “strong nationalism” persisting in China and Vietnam, and Beijing “will not stand any joint cooperation in our claimed maritime area”.

It was China's hope that “not only claimant states, but all external states like U.S., Japan and India play a positive role to push for a peaceful settlement”, he added.

ASEAN approach

Mr. Wu also reiterated China's opposition to the protracted dispute being discussed at international fora rather than being handled on a bilateral basis, as suggested by several ASEAN countries who favour a multilateral approach. On Wednesday, the 10-member group issued a statement following a two-day summit in Phnom Penh saying their leaders “stressed the need to intensify efforts to ensure the effective and full implementation of the DOC [Declaration on the Conduct of Parties] based on the guidelines for the implementation of the DOC”.

This was similar to the language used at the end of the ASEAN summit last year and weaker than some expected, in apparent deference to Chinese concerns.

“This is a weak statement,” Pavin Chachavalpongpun, a scholar at the Institute for Southeast Asian Studies in Singapore and former Thai diplomat, told the Agence France-Presse. “But it's understandable in the sense that ASEAN has been unable to find a common position regarding the South China Sea,” he said.

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