Thayer Consultancy Background Brief:

ABN # 65 648 097 123

United States Takes Further
Action Against CNOOC
Carlyle A. Thayer
January 16, 2021

According to a statement made by U.S. Secretary of State Mike Pompeo on the

morning of January 15 (Vietnam time), the U.S. and all law-abiding countries are
deeply concerned about keeping the South China Sea free and open.
In addition, the Department of Commerce has added the China National Offshore Oil
Corporation (CNOOC) Limited to the Entity List. It said CNOOC has "repeatedly
harassed and threatened offshore oil and gas exploration and extraction in the South
China Sea, with the goal of driving up the political risk for interested foreign partners,
including Vietnam."
We ask your to assess the impact this will have on Vietnam with regard to the
aforementioned action taken by the United States.
ANSWER: The actions taken by the U.S. Department of State and Department of
Commerce will have limited or little impact on Vietnam. Secretary of State Mike
Pompeo imposed visa restrictions on travel to the United States affecting Chinese
officials, military officers and business executives responsible for land reclamation,
militarization and coercion in the South China Sea. The visa restrictions also apply to
the immediate families of these Chinese officials. These restrictions will not affect the
daily work routines of the individuals and their families targeted by these visa
restrictions.
The latest action by the Department of Commerce to add the China National Offshore
Oil Company (CNOOC) to its Entity List only applies to individuals, organisations and
companies based in the United States. It requires these entities to comply with
additional license requirements to export, re-export or transfer (in-country) items
subject to the Export Administration Regulations. This action is largely symbolic as
CNOOC does not have a major commercial presence in the United States. CNOOC’s
global operations will not be affected in any major way as the U.S. bans do not apply
to trade in hydrocarbons or joint ventures outside the South China Sea region.
Both the State Department and Treasury Department issued press releases strongly
criticizing China. The State Department censured China for its large-scale reclamation,
construction, militarization and coercion in the South China Sea. The Commerce
Department singled out CNOOC’s harassment and intimidation against offshore oil
and gas exploration and extraction in the South China Sea by littoral states.
 2

Vietnam indirectly benefits by these U.S. punitive measures because they call out
Chinese actions in the South China Sea that Vietnam has long protested. But U.S.
actions will have no palpable impact on CNOOC’s or China’s aggressive behavior in the
South China Sea.

Suggested citation: Carlyle A. Thayer, “United States Takes Further Action Against
CNOOC,” Thayer Consultancy Background Brief, January 16, 2021. All background
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.