PetroVietnam Protests Chinese Plans as South China Sea Spat Deepens - WSJ.com

A spat between China and Vietnam over energy rights in the South China Sea intensified on Wednesday as Vietnam's biggest company called on China to scrap its plans to develop areas near the Vietnamese shore.

The disagreement, the latest in a string of arguments over the potentially energy-rich sea, erupted earlier in the week when China National Offshore Oil Corp. said it was offering a new batch of oil-exploration blocks inside the 200-nautical-mile exclusive economic zone granted to Vietnam under the United Nations' Law of the Sea.
Vietnam's government quickly objected, saying the Chinese state oil firm was moving into its territorial waters. On Wednesday, state-run Vietnam Oil & Gas, or PetroVietnam, weighed in, showing how territorial claims in the sea are increasingly being backed up by powerful companies in addition to rival governments, and potentially adding new sources of tension to the conflict.
PetroVietnam Chairman Do Van Hauon Wednesday described the Chinese firm's strategy as illegal and urged it to cancel the bidding, adding that two of the blocks offered by China National Offshore Oil, known as Cnooc, overlap with those offered by PetroVietnam.
"We strongly protest Cnooc's offering to international companies and we request foreign firms not to get involved," Mr. Hau told reporters.
Cnooc's spokesman in charge of legal affairs wasn't available to comment. At an earlier news briefing, China's Foreign Ministry said Cnooc's tender represented "normal business activities" in line with Chinese law and international practice.

more info--->>>  PetroVietnam Protests Chinese Plans as South China Sea Spat Deepens - WSJ.com

Economists slam measly gasoline price cut, import tax | Look At Vietnam

Economists slam measly gasoline price cut, import tax 

May 24, 2012

A worker pumps gasoline to a motorcycle at a gas station in Hanoi. The pump price of A92 gasoline was reduced by VND500 per liter to VND23,300 (US$1.1) on May 9.
Economists have criticized the recent fuel price cuts and the reimposition of the import duty on petroleum products as coming too little, too late.
The pump price of A92 gasoline was reduced by VND500 per liter to VND23,300 (US$1.1) on May 9, and diesel by VND300 to VND21,600.
Import duties, which were scrapped on March 8, have been reinstated at 2 percent on gasoline and diesel and 3 percent on kerosene and fuel oil.
Gasoline prices increased twice this year, in March and April, by a total of VND3,000.
Nguyen Minh Phong of the Hanoi Socioeconomic Research Institute said the reduction came in response to public pressure after a VND900 increase on April 20. Petroleum companies were only losing VND500 per liter at that time.
He said the Ministry of Finance, instead of raising the import tax, should have ordered petroleum companies to make deeper cuts in gasoline prices.
Many firms are having difficulty merely surviving due to a slump in demand and other problems, and could do with bigger price cuts to help reduce costs, he explained.
The government’s tax breaks won’t suffice, he said, referring to a tax relief package of VND29 trillion ($1.4 billion).
Le Dang Doanh, an economist, said: “The meager price cut and import tax increase would make people lose faith (in the government’s policies). Restoring public confidence is much more important than collecting gasoline import taxes.”
The fuel price cuts should have been bigger because global prices have fallen sharply. According to the Vietnam National Petroleum Group, also known as Petrolimex, the gasoline price in Singapore fell to $121.6 per barrel on May 9 from $128.1 on April 20.
Nguyen Tien Thoa, head of the Ministry of Finance’s Price Control Department, said the interests of fuel traders, consumers, and the government come under consideration whenever gasoline prices are adjusted.
According to the tax framework issued by the department, duties on gasoline and diesel can be raised to a maximum of 20 percent and 15 percent.
The tax revenues can be used to stabilize gasoline prices when global prices rise, Thoa said. “The price is forecast to rise this winter when demand increases.”
Thoa said gasoline accounts for 3.2 percent of the basket of goods and services used to calculate the consumer price index. The VND500 price cut would help bring down the CPI by 0.24 percentage point, he said.
But most industries said the reduction is too meager for them to cut their own prices.
Nguyen Manh Hung, chairman of the Vietnam Automobile Transport Association, said: “It is an insignificant reduction. So, transport firms cannot cut their prices.”
Pham Xuan Bang, a Hanoi taxi driver, said: “We (taxi drivers) did not expect the small reduction. It came just to make sure people are not shocked by future hikes.”
Policy issues
Ngo Tri Long, former deputy head of the Market and Price Research Institute, said retail prices are adjusted based on average fuel costs over 30 days.
“The period is too long, failing to precisely reflect changes in the world market. We need to shorten the period, maybe to a week.”
Thoa said: “We are aware of the problems in calculating fuel prices and plan to fix them.”
He said shortening the period to 10 or 20 days will be considered.
A new policy limiting the commissions fuel companies pay retailers could also be introduced, he said, adding that excessive commissions are paid in the hope of expanding market share.
The average price during the 30-day period ending May 8 was VND828 per liter lower than the retail price on that day, he revealed.
Some analysts said the fuel price adjustments are not timely or based on market forces.
In 2009 the government passed a decree stipulating that fuel prices would be based on the market.
Under the decree, businesses are allowed to adjust retail prices and only have to inform the Ministries of Finance and Industry and Trade about it.
But due to spiralling inflation, the government invoked a clause in the decree which says “if the price hike can affect socioeconomic development, the government will adopt measures to stabilize fuel prices” to repeatedly intervene.
With the government only increasing fuel prices when it is no longer able to keep them unchanged, the hikes have come in massive chunks instead of incremental ones, the analysts pointed out.
But other analysts said that, since the gasoline market is monopolistic – with Petrolimex holding some 60 percent of the market – the government should regulate the prices.
The country’s sole refinery Dung Quat contributes too little to the market to help the government stabilize prices when world prices are volatile.
The 6.5-million-ton-per-year refinery, located in the central province of Quang Ngai, meets only 30 percent of the domestic demand. It is seeking to sell a 49 percent stake to foreign investors to raise funds to expand capacity by 54 percent to 10 million tons a year.
This would help it to meet 40-45 percent of demand, according to the Binh Son Refining and Petrochemical Co, which runs the $2.2-billion refinery.
Even with Dung Quat running at full capacity, Vietnam imported 10.65 million tons of oil products in 2011, according to the General Statistics Office.

By Ngan Anh, Thanh Nien News (The story can be found in the May 18th issue of our print edition, Vietweek) 

Chinese continue to intimidate Vietnam

Chinese newspapers distort truth, intimidate Vietnam

June 23, 2011 about News, Politics

The editorial published in Global Times on June 11 used threatening words such
as: “Vietnam seems completely ignorant of the reactions that China can offer”;
“If using war to resolve territorial disputes Vietnam will lose

LookAtVietnam - The Chinese newspaper Global Times published an editorial
titled “Tougher action towards China cannot benefit Vietnam” to which the
Vietnamese Dai Doan Ket Newspaper has replied appropriately “China’s newspaper
distorting the truth and intimidating the Vietnamese People”.

Position of Vietnamese vessel Binh Minh 02 during the incident on May 26 when Chinese ships cut its survey cable

Two of three Chinese ocean surveillance vessels violate Vietnam’s water
teritorry and cut off a survey cable of vessel Binh Minh 02 on May 26.
After experiencing 20 very turbulent years, Vietnam and China had normalized
their relations with a basic pledge, “Close the past and go forward into the
future”. They aimed to build a relationship under the slogan: “friendly
neighbors, comprehensive cooperation, long-term stability, future-oriented”.
In addition, the two nations recently agreed to set up comprehensive strategic
partner cooperation.
This was a valued and treasured achievement that was created with much effort
and a concerted will by both sides and remains firmly respected and endorsed by
Vietnam.
Unfortunately, many newspapers in China have continuously issued hostile
articles, distorting Vietnam’s image and Vietnam-China relations. The articles
have increased in number after Chinese vessels cut off cables of a Vietnamese
oil exploration vessel in Vietnam’s exclusive economic zone two weeks ago. An
exploration cable of the PetroVietnam vessel, Binh Minh 2 (Sunrise 2) was cut by
Chinese ocean surveillance ships on May 26. Two weeks later, a Chinese fishing
boat rammed the survey cables of the PetroVietnam vessel, Viking II that was
operating in Vietnam’s EEZ.
Amongst all the Chinese newspapers, the Global Times has raised the biggest
voice over China’s actions in Vietnam’s EEZ.
The paper issued an editorial titled “Tougher action towards China cannot
benefit Vietnam”, which clearly distorts the actual truth and Vietnam’s reaction
to the violations.
The editorial ridiculously blames Vietnam for threatening China. It was not a
Vietnamese vessel that attacked a Chinese vessel but contrarily it was the other
way round. A Vietnamese vessel was clearly threatened by a Chinese ship. Chinese
vessels not only threaten but also provoke, which is unacceptable to any country
as defined under international law and procedure. This certainly does not call
for a large number of print and online newspaper articles that have repeatedly
used grudging and accusative wordings to deeply offend the dignity of the
Vietnamese people.
Such rhetoric does not make a nation proud nor does it portray the decorum of a
civilized country, in particular of two socialist countries that are close
neighbors.
The editorial published in Global Times on June 11 used threatening words such
as: “Vietnam seems completely ignorant of the reactions that China can offer”;
“If using war to resolve territorial disputes Vietnam will lose”… (Although I do
not want to, I am compelled to remind about events in the 1970s when China
attacked the Hoang Sa archipelagoes (Paracel Islands) and launched a war on the
Northern borders of Vietnam and the 1988 event when China attacked some islands
in Truong Sa archipelagoes (Spartly islands). This reminder is aimed at exposing
those who not only threaten but also wage war against the Vietnam-China
relationship.
The provocative actions of the Chinese ocean surveillance ships and articles
like the Global Times editorial, disturb and hurt Vietnamese people’s sentiments
towards China, though not towards all the Chinese people in general. What the
Global Times says is far from the truth: “Chinese people’s feelings towards
Vietnam that were accumulated day by day have reduced to ashes while reading
Vietnam’s reactions through the media”.
The emphasis on big country and small country was very marked by the author.
Realistically the world has powerful and not so powerful countries based on
geographic, economic and population strata. However all countries are equal when
it come to international relations. This notion has been continuously repeated
by Chinese leaders.
China’s present attitude contradicts the policy of respecting smaller countries
as the article states.
In addition, this conduct displays an encroaching attitude by a big country and
raises concerns in the public besides affecting China’s image of a peacefully
growing economy.
The editorial also incorrectly assumed that legal reaction from Vietnam was the
result of domestic pressure, stimulating internal sentiments, attracting
attention from the international community…, reflecting nationalism and causing
contradictions between the two countries.
The problem between the two countries began when Chinese vessels in the East Sea
broke international law. All Vietnamese felt betrayed as all with a conscience
in the world would as well.
International law in today’s modern world does not permit any country to behave
in an encroaching manner with another country and expect it to remain silent.
How would Global Times react if foreign vessels attacked Chinese ships and cut
their cables in the Chinese EEZ recognized by international law? Certainly not
in the area of so-called nine-stage line recognized by China itself and
thousands of miles away from the Chinese coast!
History knows that China was also invaded and the Chinese people know dishonor
at the hands of foreigners. Surely then they must understand the discontentment
of the Vietnamese people.
The editorial said that Hanoi took a back step after successfully determining
the boundaries in the Tonkin gulf. These allegations are only worth dismissing.
Does Beijing want now to change the word Ha Noi?
It is most regrettable that what took 20 long years for the two countries to
overcome and build by way of renewed cooperative relations is now being pushed
aside by regrettable action by China.
At the end of the article, the author writes “Please reconsider the history”.
Exactly! Please review the thousand-year history of your neighbors and follow
decorum and a moral code of conduct towards neighbors who value peace and good
friendly relations with all countries.
Every Vietnamese citizen has a deeply embedded desire to behave in accordance
with moral standards towards good friendly countries. Surely this too must be
the wish of the Chinese people as well!
Source: SGGP/Dai Doan Ket

US warns China over the East Sea | Look At Vietnam - Vietnam news daily update

US warns China over the East Sea

June 7, 2011 about News, Politics

LookAtVietnam - Robert Gates, US defence secretary, on June 4 warned that there were “increasing concerns” about recent Chinese provocations in the East Sea and other disputed waters in Asia.

US Defence Secretary Robert Gates (photo: Reuters)

Vietnam and the Philippines have in recent weeks accused China of engaging in aggressive behaviour in the East Sea, escalating a long-running dispute over the waters.

“I fear that without rules of the road and agreed approaches to dealing with these problems that there will be clashes,” Mr Gates told the Shangri-La Dialogue, a high-profile Asian defence forum.

But asked whether the Chinese actions undermined Beijing’s mantra that China was pursuing a “peaceful rise”, Mr Gates said: “I don’t think it has risen to that level yet”.

Just over a week ago, Vietnam accused China of a “serious violation” of international law after Chinese coast guard vessels cut the cables of an oil exploration ship of PetroVietnam, the state energy company.

Then, last week, Manila protested to China over the unloading of construction materials by a Chinese vessel on a reef claimed by the Philippines, which raised fears that Beijing might abandon a nine-year old commitment not to start new construction on disputed land features in the East Sea.

While Mr Gates expressed concern about the increase in incidents, his comments appeared to mark a sharp reversal from the tougher approach taken by the US government last year. At the same conference in 2010, Mr Gates called on China to adhere to international law. The following month, Hillary Clinton, US secretary of state, angered Beijing during a visit to Vietnam by declaring the South China Sea a national interest of the US.

Last year’s heightened US rhetoric came partly in response to appeals from south-east Asian countries for a stronger US role in the region to balance China. But the resulting tension between Beijing and Washington later raised concerns that the incumbent global naval power and a rising China could get into a conflict in their neighbourhood.

Najib Razak, prime minister of Malaysia, highlighted those concerns on Friday in calling for a security order that would not force countries in the region to choose between two blocs.

Meanwhile, Beijing continues to pledge that it is pursuing a “peaceful rise”. This doctrine includes assurances that China’s increasing economic, political and military clout will not pose a threat to any other country, and that Beijing will not seek the role of a hegemon.

General Liang Guanglie, China’s defence minister and the highest-ranking delegate Beijing has ever sent to the Shangri-La Dialogue, is expected to reiterate this message when he addresses the summit on June 5.

Washington’s softer line on China comes as the two countries are seeking to deepen their military dialogue which the US is reluctant to see disrupted again.

On Friday, the US and Chinese delegations held bilateral talks which both sides described as cordial. Last month, Chen Bingde, the People’s Liberation Army’s Chief of General Staff, paid a week-long visit to the US.

Mr Gates, who was making his final visit to Asia before stepping down as Pentagon chief later this month, told the forum that the US would maintain “robust military engagement” and increase port calls and naval engagements in the region. He also dismissed concerns that pressures on the Pentagon budget, as the US addresses its fiscal deficit, coupled with rising Chinese military budgets meant US influence in the region would wane.

“I will bet you a $100 that five years from now the United States’ influence in this region is as strong if not stronger than it is today,” he said.

Source: FT

Products’ and meal services remain sky-high despite material price falls

Though the price of petrol and gas, plastics, and input materials, like wheat flour and vegetable oil, have been sharply decreasing, the prices of some finished products and meal services remain sky-high.

Material prices on the decrease


Statistics show that since August 2008, the price of petrol and gas, the important input materials for production, have decreased by over 40% from the highest peak, while the main materials for food have decreased by 30-50% from the beginning of the year. The price of wheat flour, for example, the main material for making cake, bread, and instant noodles, has decreased by over 30%.

The HCM City-based Binh Dong Wheat Flour said that the price decrease tendency began in August and September. The price of flour sold by the company has dropped to VND 7,500-8,500/kg from VND 12,500/kg.

Wheat bran, which is used for making cattle feed, has also seen a price decrease by VND 1,800-2,000/kg, dropping from VND 4,500-4,800/kg previously to VND 2,600-2,800/kg.

According to the Vietnam Vegetable Oil Joint Stock Company, the price of palm oil, the main material for making vegetable oil, imported from Malaysia, has stayed at $700/ton for the last month, a considerable decrease from $1,200/ton at the beginning of the year.

The price of whole milk has also been on the decrease on the world market. Since October 2008, when signs of price decreases appeared, the material milk price has decreased by 30-50% to $2,000/ton now.

Prices of finished products remain sky-high

Except home appliances, consumer electricity products and brewery, which have seen price decreases of 5-10%, and rice, fresh meat and vegetables, which have seen prices return to the levels seen before the flood, the remaining products, especially processed food, like instant noodles, confectionary and dairy products have not seen any price decreases at all.

Restaurants, both luxury and popular for common people, are still keeping high prices. People still have to pay VND 15,000 for a popular meal, and VND 20-30,000 for a higher-grade meal.

Right after the petrol price was raised in July 2008, the retail price of a La Vie 19-litre bottle of water was raised to VND 40,000 from VND 36,000. However, the price of the product has not decreased, though the petrol price has been lowered several times.

Vinamilk, reasoning the higher price of fresh material milk, has raised the liquid dairy products by 5-10% since the beginning of December. Hai Ha – Kotobuki confectionary producer has also raised the prices of a series of products by 10-20%.

Unfair to consumers

In a talk with VietNamNet’s reporters, many companies, though admitting the input material price decreases, still said that they would not consider lowering sale prices right now for fear that the consumption will not increase immediately. If slashing the sale prices, producers will have to face decreases in turnover.

An instant noodle producer told VietNamNet that it does not think it is necessary to slash sale prices, adding that the time of having cheap food is over.

In the context of the economic fever, the lower purchasing power proves to be the biggest concern of governments around the world, including Vietnam. The Government of Vietnam has been taking drastic measures to stimulate demand. However, the measures will have no significance if producers themselves do not join forces to stimulate the demand by slashing their products’ prices.

Nguyen Nga

Vietnam begins operating new oil field

Vietnam has opened a new oil field that will boost national crude oil output by 21 percent by the end of this year, officials said.
Four wells from the Golden Lion oil field off Vietnam's southern coast are now producing 60,000 barrels per day, Vu Ngoc An, general manager of Cuu Long Joint Operating Company said Wednesday. The output will reach at least 65,000 barrels per day when two other wells begin operating by the end of this year, he said.
The company has also discovered oil in two other fields, where it plans to start production in 2010 and 2013, he said.
"We were fortunate to find not just one, but four oil fields," An told reporters "Before us, some companies had already explored in the area, but they did not find anything."
Cuu Long's owners include PetroVietnam, which controls 50 percent , and U.S.-based ConocoPhillips, which owns 23.25 percent. It has invested over $1 billion in the Golden Lion field, An said.
The company also operates the nearby Black Lion oil field, which started production five years ago and produces 55,000 barrels per day.
Last year, Vietnam produced 16 million tons of crude oil, or 307,000 barrels per day. It hopes to produce 17 million tons next year.
The country currently exports all its crude oil. Its first refinery is slated to open early next