US energy giant, ExxonMobil, is working on a final plan to bring Vietnam’s largest offshore gas project, the Blue Whale field, into operation after a long delay which is believed to be caused by China’s pressure.
Texas-based ExxonMobil said last week it was continuing its preparatory work on the project, with the final investment decision dependent on factors including regulatory approvals and gas sales contracts, according to Reuters.
The Blue Whale field, located about 80 km from Vietnam’s central coast and valued at $10 billion, was officially announced in November 2017 at the APEC Summit in Danang with the attendance of then US President Donald Trump. But in mid-2019, there were rumors that ExxonMobil was looking to sell this project due to problems in negotiations with the Vietnamese government. During that time, Beijing constantly threatened Vietnam and other countries in the region about oil and gas exploitation in disputed areas in the South China Sea (Vietnam calls it the East Sea), including clashes between Vietnamese and Chinese ships in the Vanguard Bank.
These tensions led Spain’s leading energy group, Repsol, to withdraw from two projects with the Vietnamese government within 12 months from 2017 to 2018.
Under Rex Tillerson, who left ExxonMobil to become the Trump administration’s Secretary of State, the energy conglomerate is one of the few companies that has resisted Chinese pressure and refused to leave the post in the South China Sea over the past decade, according to Asia Times.
The location of the Blue Whale project is right near the nine-dash line “cow’s tongue” that China unilaterally raised to claim sovereignty over most of the South China Sea but was rejected by the international court in The Hague in the Netherlands in 2016
ExxonMobil once confirmed to VOA that the Blue Whale project, which is expected to generate $20 billion in revenue for the Vietnamese government from gas reserves, can provide electricity for a city equivalent to Hanoi for more than 20 years, not in a disputed area. Vietnam’s Ministry of Foreign Affairs in September 2019 denied reports that ExxonMobil would sell a 64% stake in the Blue Whale project.
The US in recent years has repeatedly accused China of “bullying” Vietnam and other countries with claims to the SCS in oil exploration activities off the disputed waters. Greg Polling, director of the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies (CSIS), a Washington-based think tank, told VOA the United States will not let Beijing intimidate their oil and gas company at the Blue Whale field.
ExxonMobil’s board of directors in October debated whether to go ahead with a number of large oil projects, including one in Vietnam, as investors push the companies on fossil fuels to be more cost-conscious and green energy, according to Reuters.
However, an ExxonMobil spokesperson told Reuters in an emailed statement that the group “completed design and engineering for the project in May 2020 and is working on final development plans.”