Singapore (Platts)--11Jul2012/547 am EDT/947 GMT

US Secretary of State Hillary Clinton told Vietnam this week that the US government supports the rights of coastal countries to their exclusive economic zones as stated in the UN Convention of the Law of the Sea of 1982, according to a statement posted on the Vietnam government website late Tuesday.

Clinton made the comments in a meeting with Vietnamese Prime Minister Nguyen Tan Dung in Hanoi on Tuesday during a two-day visit to the country which ends Wednesday, according to the statement.

In the meeting with Nguyen, Clinton also expressed concerns over the recent tensions in the South China Sea, the statement said.

"The two sides [Vietnam and the US] highlighted the importance of ensuring peace, stability and cooperation, [and] maritime freedom in the sea. They affirmed that the sovereignty disputes should be peacefully addressed through international laws, particularly the UNCLOS 1982," it said.

The statement on the Vietnamese website closely traces the wording in a draft document being prepared by the Association of Southeast Asian Nations calling for all sides to "undertake to resolve territorial...disputes in the (South China Sea) by peaceful means in accordance with international law, including UNCLOS," AFP reported.

ASEAN is holding a series of meetings this week in Cambodia, culminating in a meeting Thursday of its member states' foreign ministers, Clinton, and representatives from China, Japan and South Korea.

Diplomatic relations between China and Vietnam have been tense since late June, after state-owned China National Offshore Oil Corp. offered up for lease nine offshore blocks that Vietnam says lie well within its exclusive economic zone and continental shelf.

State oil and gas company PetroVietnam protested the move on June 27 and urged foreign oil companies operating in Vietnam not to participate in the licensing round, saying it was an "illegal" offer.

CNOOC's offer came two days after Vietnam had passed a law in its National Assembly asserting the country's sovereignty over the Paracel and Spratly islands, a step that angered China which said it threatened peace and stability in the South China Sea.

China has also been involved in a recent showdown with the Philippines involving disputed maritime territory and the smaller nation's attempt to arrest Chinese fishermen it said were encroaching on its waters.

The foreign ministries of both the Philippines and Vietnam have indicated they plan to raise the issue at the ASEAN meetings this week in Cambodia.

Clinton also met Tuesday with her Vietnamese counterpart, Pham Binh Minh. According to a transcript of a joint press conference posted on the US state department website, Clinton said after the meeting: "We look to ASEAN to make rapid progress with China toward an effective code of conduct in order to ensure that as challenges arise, they are managed and resolved peacefully through a consensual process in accordance with established principles of international law."

China has said that ASEAN is not the appropriate forum for discussing maritime disputes, and editorials last week in state media said the Philippines was trying to stir up trouble issue before the ASEAN meetings.

China prefers settling the competing claims in the South China Sea bilaterally, dealing with each of the other claimants individually.

"China hopes to maintain positive cooperation and does not want any interference and hopes that efforts to maintaining peace and stability will not be sabotaged," China Foreign Ministry spokesman Liu Weimin said Tuesday.

China claims around 80% of the potentially resource-rich South China Sea, which overlaps part of the exclusive economic zone and continental shelf of other claimants, particularly Vietnam and the Philippines.

The areas that CNOOC offered up for exploration on June 23 fell almost entirely within Vietnam's 200-mile exclusion zone and stretched across oil and gas blocks that Vietnam has already awarded to ExxonMobil, India's ONGC and Russia's Gazprom.

ASEAN is made up of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

--For a major news feature on how tensions have risen as China offers blocks in waters offshore Vietnam, please go to http://plts.co/schsea12

--Dao Dang Toan, newsdesk@platts.com
--Thomas Hogue, thomas_hogue@platts.com
--Edited by Jonathan Dart, jonathan_dart@platts.com

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