China Warns Exxon Over Exploration Deal With Vietnam, Says Breach Of Sovereignty

Jul 21, 2008 (financialwire.net via COMTEX) -- XOM | Quote | Chart | News | PowerRating -- July 21, 2008 (FinancialWire) According to the South China Morning Post, China has warned Exxon Mobil Corp. (NYSE: XOM | Quote | Chart | News | PowerRating) to pull out of an exploration deal with Vietnam, saying that the project is a breach of Chinese sovereignty.

Though Vietnam and China have agreed to cooperate in oil and gas exploration in the Gulf of Tonkin in the north, last year BP Plc (NYSE: BP | Quote | Chart | News | PowerRating) halted plans to conduct exploration work off the southern Vietnamese coast, citing the territorial tensions.

The protests involve a preliminary co-operation agreement between state oil firm PetroVietnam and Exxon Mobil covering exploration in the South China Sea off Vietnam's south and central coasts.

China and Vietnam have a number of festering disagreements about territory. The two countries dispute sovereignty over the Spratly Islands, a string of rocky outcrops in the South China Sea suspected of containing large oil and gas deposits and also claimed by Taiwan, Brunei, Malaysia and the Philippines.

In December China chided Vietnam after protests in front of the Chinese Embassy in Hanoi proclaiming that the Spratly and Paracel islands belonged to the Vietnamese.

Shares of Exxon Mobil rose $1.21, or 1.5 percent, to close at $81.54 Friday.

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