India is being pulled into a complex and increasingly tense territorial dispute in the South China Sea, with China repeatedly warning ONGC, the Indian state oil company, that its joint exploration plans with Vietnam amount to a violation of Chinese sovereignty.
The Indian government responded to the latest Chinese warnings Thursday by repeating its pledge to continue exploring for energy in the South China Sea, where China is embroiled in territorial disputes with Vietnam, the Philippines, Taiwan, Malaysia and Brunei.
ONGC, meanwhile, said it planned to resume drilling next year at one of its two remaining blocks in the area, after a temporary suspension there because of a hard seabed, and after relinqishing another block last year because it lacked production potential.
“We plan to restart drilling there,” said ONGC Chairman A.K. Hazarika. “The [Indian] Ministry of External Affairs has informed us that the block is well within the territory of Vietnam and so there are no issues with exploration there.”
The testy public exchanges follow an unusual incident in July when, according to the Indian government, an Indian navy ship visiting Vietnam as part of expanding bilateral defense ties received a radio message warning it that it was entering Chinese waters. China has dismissed India’s version of the incident as “groundless.”
Analysts say the fresh standoff between Asia’s two emerging economic and military giants, which fought a brief war over their disputed Himalayan land borders in 1962, increases the risk of a military flare-up in the South China Sea.
China, which won the 1962 war, has been involved in several angry exchanges and incidents at sea this year with Vietnam and the Philippines, which have been beefing up their military arsenals, and defense ties with the U.S., in response to what they see as growing Chinese assertiveness.
The U.S. has meanwhile been fending off repeated Chinese protests about its surveillance operations in the area, while trying to encourage democratic allies and partners, especially India, Australia and Japan, to play a more active role in defending freedom of navigation in the region.
The South China Sea, which Beijing claims almost in its entirety, is thought to be rich in oil and gas—although proving that has been hard because of the territorial disputes—and is one of the world’s most important shipping routes.
It is also now one of the region’s major potential flashpoints as emerging Asian economies, especially China and India, build up their military firepower and seek the energy and other resources they need to fuel growth.
“Beijing is worried that other claimants are becoming more active and any de facto occupation and/or exploration lend credence and bargaining power in future negotiation,” said Jingdong Yuan, an expert on the South China Sea at the University of Sydney’s Centre for International Security Studies.
One of the latest Chinese warnings to India came Thursday in an article on the website of the People’s Daily — the main Communist Party mouthpiece —which was written by its correspondents in Vietnam and India and was not published in the newspaper itself.
“It’s not worthwhile for Vietnam and India to damage the greater interests of the peace, stability and economic development between China and Vietnam, China and India, and in the whole region, for the sake of these small interests in the South China Sea,” the article said.
China’s Foreign Ministry spokesman, Hong Lei, also repeated the Chinese government’s claims to sovereignty over the area. “Any foreign company that engages in oil exploration activity in waters under China’s jurisdiction without the agreement of China has violated China’s sovereignty, rights and interests,” he said Thursday in a briefing. “This is illegal and invalid.”
Vishnu Prakash, spokesman for India’s Ministry of External Affairs, played down the the People’s Daily article, as well as the incident with the Indian navy ship, and declined to comment on media reports that China had made an official diplomatic protest over ONGC’s plans.
But he said India strongly believed in freedom of navigation in the South China Sea and would continue to explore in the area as part of a “quest for energy security”.
“We’re engaged with China closely,” he said. “And as we are closely cooperating with China, we’re also closely cooperating with Vietnam.”
India and China have been expanding economic ties in the last few years, but many Indian officials and experts harbor deep concerns about Beijing’s growing military power and its expanding influence in neighboring countries, especially Pakistan.
In response, India has been building closer defense and commercial ties with the U.S. and many of its regional allies and partners, including Vietnam, which India’s Foreign Minister, S.M. Krishna, visited last week.
ONGC’s overseas arm, ONGC Videsh, accounts for much of India’s investment in Vietnam.
It operates one gas field—Block 06.1 in the Nam Con Son basin off Vietnam’s south coast—in a joint venture with TNK-BP and PetroVietnam, which China has not protested over.
ONGC Videsh also won a contact in 2006 to jointly explore with PetroVietnam in Blocks 127 and 128 in the Phu Khanh basin further north. China protested at the time that both blocks were in its waters, and maintains that position now, according to the People’s Daily article.
A spokesman for Vietnam’s Foreign Ministry said Thursday that Blocks 127 and 128 were both in Vietnamese territorial waters. He declined further comment.
Vietnam launched a fresh round of licensing this year for blocks it says are not in contested waters. However, China has never specified the precise extent of its territorial claims.
A spokeswoman for ONGC Videsh said the company was only exploring now in Block 128, having relinquished 127, but declined to comment on whether it had future exploration plans with Vietnam.
Another Indian company, Essar Group, has a production-sharing contract for a petroleum block off Vietnam’s coast. An Essar spokesman said it was not in “controversial” waters and Essar did not plan to bid for further exploration rights from Vietnam.