July 22, 2008 / 3:46 PM / 11 years ago

UPDATE 1-Petrovietnam surveying oil block eyed by China-BP

(Adds detail, background, and Exxon case)

By Tom Bergin

LONDON, July 22 (Reuters) - State oil group Petrovietnam has resumed exploration activity in an area off Vietnam’s coast which is the subject of a territorial dispute between Hanoi and China, Petrovietnam’s partner, oil major BP Plc (BP.L) said.

“Petrovietnam is currently executing contracts for offshore survey activities on blocks 5.2 and 5.3,” BP spokesman David Nicholas said on Tuesday.

Last year, BP suspended planned seismic surveys of Block 5.2 following Chinese criticism. Vietnam said that the area and the $2 billion natural gas field and pipeline project it plans were within the bounds of its sovereignty.

The blocks are about 370 km (230 miles) offshore, between Vietnam and the Spratly Islands, a string of rocky outcrops in the South China Sea which are thought to contain large oil and gas deposits and which are claimed by Vietnam, China and Taiwan.

U.S. oil major ConocoPhillips (COP.N) also has an interest in Block 5.3, according to its website.

China said on Tuesday it had told Exxon Mobil Corp (XOM.N) to pull out of an oil exploration deal with Vietnam that it sees as a breach of Chinese sovereignty.

Vietnam has traditionally been wary of its larger Asian neighbour and in 1979 the two countries fought a brief border war after Vietnam occupied Cambodia and overthrew the murderous Khmer Rouge regime backed by Beijing.

Beijing and Hanoi normalised relations in 1991.

In 1988, China and Vietnam fought a brief naval battle near one of the Spratly Island reefs in which more than 70 Vietnamese sailors died. But tensions have eased considerably in recent years as relations improved. (Reporting by Tom Bergin; Editing by David Cowell)

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