Partnering with American firms would shrink Vietnam’s trade surplus with the US—and help Hanoi hold the line in the South China Sea.
As a fast-growing economy, Vietnam’s demand for energy is projected to increase by between 8.5 and 9.5 percent annually over the next five years. Together with the need to reduce its dependence on coal-fired power plants, this has led Vietnam to explore alternative energy sources. Once it comes into operation, for example, the Son My 2 power complex will create an annual demand for American LNG worth $2 billion. This is a significant amount given that in 2019 Vietnam’s total import turnover from the U.S. stood at $14.4 billion.
In this connection, China’s repeated harassment of Vietnam’s oil and gas activities in the South China Sea gives Vietnam another good reason to engage U.S. firms like ExxonMobil for its oil and gas projects, especially given that other foreign partners have proven unable to resist Chinese intimidation. After the Spanish oil firm Repsol decided to cancel production sharing contracts with PetroVietnam for three blocks near Vanguard Bank in the South China Sea, PVN’s longstanding Russian partner Rosneft also appears to be buckling under Chinese government pressure.
This article was written by Le Hong Hiep
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