Friday, August 2, 2019

Standing up to China: Vietnam going ahead with Oil Explorations in Vanguard Bank

Blue are Chinese Controlled and Green are under Vietnamese Control

Vietnam extended the operations of oil rig on Vanguard Bank to September. This is a direct challenge to Chinese position of owning everything within nine-dashed line (almost entire South China Sea). China already deployed a survey ship - Haiyang Dizhi 8(Marine Geology 8), and multiple coast guard ships to the area; apparently to disrupt the operations and force Vietnam to back down from its current stand.

World, especially South China Sea coastal states were (and still are) watching whether Hanoi will back down like in 2018 or go ahead with operations. Last year, Hanoi under tremendous pressure from China cancelled Repsol's contract. Four years before that, Chinese moved their own oil rig to the region, setting of anti-China riots in Vietnam. Later China withdrew that rig. Two years before that, in 2012, China took over Scarborough Shoal. Probably Vietnam learned lessons from past events and realized that, backing down is not going to help its claims in anyway. Interestingly this time, decision to extend the operations came right after US DoD released a statement backing Hanoi.

Vanguard bank is coming inside Chinese nine-dash line. But it is hard for anyone to back Chinese claims other than China. These pieces of uninhibited (mostly submerged) geographic features are energy rich and located around 200 nautical miles off Vietnams coast but more than three times of that distance from China. Nine dashed line runs as far as 2,000km (1,200 miles) from Chinese mainland to within a few hundred kilometers of the Philippines, Malaysia and Vietnam.

Vanguard Bank

History of Rig in Vanguard Bank

This rig is in a block which is part of 'Nam Con Son' project (developed by BP and ConocoPhillips in early 2000s) to carry gas by pipeline to mainland. Today, natural gas from Block 06-01’s Lan Do field provides approximately 10% of Vietnam’s total energy needs. Rosneft acquired TNK-BP in 2013 and they became block's operator. In May 2018, Rosneft contracted Hakuryu-5 to drill a new production well in 06-01 at a second gas field called Lan Do. Despite possibility of Chinese opposition, Rosneft went ahead with drilling at Lan Do and another field, Phong Lan Dai, in Block 06-01. In May 2019, Rosneft contracted the Hakuryu-5 to drill another well in 06-01.

CCGS Haijing 35111 - Dancing in Malaysian Oil fields

Since 2013, China maintains a near-constant coast guard presence around Luconia Shoals. Most areas of this geographic features are underwater at high tide but still claimed as islands by Beijing and Taipei.

Chinese coast guard ship (CCGS) Haijing 35111 started patrolling waters near Luconia Shoals. This area is near to coast of Malaysia’s Sarawak State. Haijing 35111's patrolling area (May 10 to 27 as per Automatic Identification Data - AIS) includes parts of oil and gas block SK308. This block is currently licensed to Sarawak Shell (subsidiary of Royal Dutch Shell). Sapura Drilling recently won the contract for Sapura Esperanza rig to drill a series of new wells at natural gas field F14. This is one of three fields Sarawak Shell is developing in block SK308. As per Asia Maritime Transparency Initiative(AMTI), AIS signals showed that two Malaysian offshore supply vessels (OSV) - Executive Excellence and Executive Courage - apparently servicing the rig by travelling back and forth between the block and Sarawak coast. On May 21, Haijing 35111 circled provocatively close to vessels and came within 80m.

CCGS Haijing 35111 in Vanguard Bank

At the end of May, Haijing 35111 returned Hainan port for a few days before heading south again. Since June 16, it has been patrolling an area 190 nautical miles off the coast of South Eastern Vietnam. Patrols are centered on oil and gas Block 06-01, located northwest of Vanguard Bank on Vietnamese continental shelf.

On July 2, vessels which supplies Hakuryu-5 where leaving the rig when CCGS 35111 maneuvered between them at high speed, passing within 100 meters of each ship and less than half a nautical mile from the rig. After patrolling Block 06-01 for nearly a month, 35111 traveled to the Chinese outpost on Fiery Cross Reef from July 12 to 14, presumably to resupply, before returning to its post near the Hakuryu-5.

China rise stakes with Haiyang Dizhi 8(Marine Geology 8)

On July 3, Haiyang Dizhi 8, a survey vessel owned by China Geological Survey (CGS), began surveying a large area of seabed northeast of standoff at Block 06-01.

Haiyang Dizhi 8 is the one which undertook, oil and gas survey across two blocks - Riji 03 and Riji 27. In 2012 China declared these and seven other blocks off the coast of Vietnam open for foreign bidding. As expected, there were no takers.

This survey vessel is protected by other coast guard vessels. Haijing 37111 and two unidentified CCG ships have accompanied the Haiyang Dizhi 8 since July 3. Vietnam dispatched two Coast Guard Vessels - KN 468 and KN 472 - from Cam Ranh Bay. They are shadowing survey ship since July 4. AIS data shows that the survey ship continues to operate, surrounded by its CCG escort which boxed out Vietnamese vessels attempting to intervene.

Highly Dangerous Situation

Current situation is highly dangerous. What happens when one of the CCG ships, in its dangerous maneuvers, hit either Vietnamese Coast Guard ship or damage the rig itself. It might be an accident, but does any governments across the region will consider it as accident? Already reports of current confrontation is reaching Vietnamese public; this will only rise the anti-China sentiment further. Under such a situation it will be difficult for Hanoi to back down or give any concessions to China in any future discussions.

Dialogue is required

Solution for this perpetual tense situation in South China is constructive dialogues. However, ASEAN nations doesn't stand a chance if dealing with China one on one. As a group they have some power and can lead to meaningful discussions. Unfortunately, that is also not gaining steam. ASEAN is trying to come up with a Code of Conduct at South China sea; but pace is very slow. No one want to take the risk of upsetting China.

Current chair of ASEAN - Thailand - don't want to fast-track the negotiations. Bangkok is pushing the issue to next chair, which is interestingly Vietnam. Currently under ASEAN, it’s the responsibility of Philippines to coordinate dialogue between ASEAN and China. They will be in that role till 2021. China probably want the code of conduct in place when Philippines is still in that position. In this case China might have to stand down from its claim of entire sea and everything under it. A settlement based on UN laws on sea with minor adjustments might be a good idea for trade and bilateral relations. 

Something positive

One major change we can see is, countries are sending their white hulled Coast Guard Ships to support their claims, monitoring waters instead of more aggressive posturing with naval ships. Coast guard is more of a law and order policing agency and this change indicates less aggressiveness from participants side. Probably a sign that, South China sea costal states including China want to deescalate things.


What makes current standoff interesting is, the joint venture company's Russian partner is none other than Russian oil behemoth Rosneft. Will Russia make some adjustments especially after recently concluded joint patrol with China over disputed Korean administrated islands in Sea of japan? It may not happen as it will upset their relations with Vietnam. Moreover, Resneft is just an operator. If Rosneft refuses, then Vietnam might find a replacement. I think Rosneft will be there. 


1. The Diplomat.
2. Foreign Policy
3. Asia Maritime Transparency Initiative


1. Automatic Identification System (AIS) data. All oceangoing vessels over 300 tons are required to broadcast this data.
2. Vanguard bank is guarded by three operational rigs in DK1 cluster. DK1 rigs are complex structure of steal on sea, where there are facilities to host small detachment of soldiers.
3. Vanguard Bank
    U.S. Board of Geographic Names: Vanguard Bank
    China: Wan'an Tan, 万安滩
    Taiwan: Wan'an Tan, 萬安灘
    Vietnam: Bãi Tư Chính
    Occupied by: Vietnam
    Legal Status: Submerged
    GPS: 7° 30' 49" N, 109° 39' 58" E

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