VIETNAM SEEKS STRONGER U.S. SUPPORT AGAINST CHINESE

UNCLAS HANOI 000864 SENSITIVE SIPDIS STATE FOR EAP/MLS, EAP/CM E.O. 12958: N/A TAGS: PGOV PREL ECON CM VM SUBJECT: VIETNAM SEEKS STRONGER U.S. SUPPORT AGAINST CHINESE PRESSURE ON EXXONMOBIL ¶1. (SBU) Summary: Citing recent press reports making public China's warning to ExxonMobil to pull out of an offshore oil exploration deal with Vietnam, an MFA official told Pol Counselor in a July 24 meeting that Vietnam will protect the interests of ExxonMobil. He also requested a strong expression of USG support for the company. End summary. ¶2. (SBU) During a July 24 meeting between the Pol Counselor and MFA Deputy Director General for the Americas Ha Kim Ngoc, Ngoc reported that Petrovietnam and ExxonMobil had signed an MOU to explore blocs 155-159 off southern Vietnam and were negotiating to explore Blocs 117, 118 and 119 further north. Both these sets of blocs are clearly within Vietnamese territorial waters, Ngoc asserted. ¶3. (SBU) Ngoc said China's approach to ASEAN countries has changed over the past five years and is now seen as "stubborn and assertive." In the case of ExxonMobil China is using new tactics; before it would only pressure the GVN with protests and warning; now it is also pressuring the U.S. companies doing business with Vietnam. "This is unacceptable to us," Ngoc said, adding that the situation of ExxonMobil is a test case; if ExxonMobil, Chevron, or ConocoPhillips were to pull out of Vietnam this could influence other companies, he predicted. "We want these companies to stay in Vietnam and we will protect their interests," Ngoc stated. ¶4. (SBU) The GVN appreciates the positive role and influence of the United States in the region, Ngoc said. Vietnam recognizes that the United States has expressed support for U.S. companies, Ngoc said, but would like to see stronger expressions of U.S. support in the ExxonMobil case. ¶5. (SBU) Comment: The July 20 South China Morning Post article concerning Beijing's threats to blacklist a major U.S. company from doing business in China if it continues to cooperate with Vietnam was probably an unwelcome surprise to Hanoi. Vietnamese leaders are reluctant to see the dispute become a domestic political issue, understanding that it could easily spark a strong nationalistic reaction among the Vietnamese people. This could create a situation in which critics point fingers at both Beijing as bully, and at the Vietnamese Government as weak in the face of pressure. This said, behind closed doors the GVN remains deeply concerned by China's tactics, knowing it will not win any arm wrestling contests with its northern neighbor and doubtful that others, including the United States, will strongly take its side in the dispute. MICHALAK