China tells Vietnam to halt oil exploration in disputed waters

BEIJING (Reuters) - China told Vietnam on Thursday to stop unilateral oil exploration in disputed areas of the South China Sea and not harass Chinese fishing boats, again raising tensions in a protracted maritime territorial dispute with its neighbor.

Vietnam had already expelled Chinese fishing vessels from waters near China's southern Hainan province, Chinese Foreign Ministry spokesman Hong Lei told a daily news briefing.

Hong's description of the confrontation last Friday was in contrast to the account by Vietnam, which said a Vietnamese ship had a seismic cable it was pulling cut by two Chinese fishing ships.

"Vietnam's statement is inconsistent with the facts," Hong said.

China is in increasingly angry disputes with neighbors including the Philippines, Taiwan, Vietnam, Brunei and Malaysia over claims to parts of the potentially oil and gas-rich South China Sea. China, which lays claim to almost the whole of the sea, criss-crossed by crucial shipping lanes, also has a separate dispute with Japan over islands in the East China Sea.

The Chinese fishing boats were in an area where Vietnam's claim overlaps with waters of Hainan province, Hong said.

New Chinese regulations allow police to board vessels deemed to be intruding in waters off the island of Hainan, though details about how this could happen have not been made clear.

"The relevant fishing vessels were in these waters conducting regular fishing activities and they were unreasonably expelled by Vietnamese military vessels," Hong said.

He added that China and Vietnam were currently in negotiations over the waters.

"We hope the Vietnam side will not engage in unilateral oil and gas exploration activities in the relevant waters, cease interfering with Chinese fishing vessels' normal operations, and create a friendly atmosphere for bilateral negotiations", Hong said.

China has made similar warnings in the past about not exploring for oil and gas in waters it considers its own.

India, which jointly conducts some oil exploration with Vietnam, said this week that it was prepared to send navy ships into the region to safeguard its interests.

Energy-hungry China is also actively exploring the resources of the South China Sea. It aims to produce 15 billion cubic meters of natural gas a year from the South China Sea by 2015, the energy administration said on Monday, raising the possibility of disputes escalating.

State-run CNOOC, China's top offshore oil producer, in late June invited foreign companies to jointly develop nine blocks in the western part of the South China Sea, a move Vietnam said was illegal because the blocks overlap its territorial waters.

The South China Sea is one of Asia's most sensitive military hotspots whose profile has been raised by a newly assertive China.

The mounting disputes come at a time when China is flexing increasing naval might, including the launch of its first aircraft carrier in September and the test flights of its first two models of a stealth jet fighter, one of which is believed to be designed to land on aircraft carriers.

(Additional reporting by Terril Yue Jones and Ben Blanchard; Editing by Nick Macfie)