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Vietnam caught between two strategic partners
US dangles ‘friendshoring’ carrot as Russia develops offshore oil and gas field
Sao Da Jr 24 Jun 2024

The United States sees Vietnam as a partner in its “friendshoring” strategy to build more resilient supply chains and bring mutual benefits, says US treasury secretary Janet Yellen.

She made the remarks in Atlanta, Georgia, on June 20, while Russian President Vladimir Putin was on a state visit to Hanoi. During the state visit, Vietnam and Russia issued a joint statement on deepening their comprehensive strategic partnership, building on the achievements of the three-decade implementation of their Treaty on Principles of Friendly Relations. This was Putin’s fifth visit to the Southeast Asian country.

At a press conference in Atlanta the same day, Yellen was asked whether Putin's visit to Vietnam to sign a slew of agreements ranging from oil and gas to nuclear science raised concerns in Washington.

She replied that the upgraded partnership between the US and Vietnam does not require Vietnam to sever ties with Russia or China.

Strategic partnership

US President Joe Biden visited Vietnam last September. During his visit, the two countries upgraded their ties to a comprehensive strategic partnership and pledged to deepen their economic cooperation.

“We are concerned about emissions and lowering emissions and addressing greenhouse gases in Vietnam,” said Yellen, citing the Just Energy Transition Partnership (JETP), a financing mechanism for lowering carbon emissions in emerging economies such as Vietnam. Yellen visited Hanoi in July 2023, just before Biden’s visit.

For the US, “friendshoring” refers to the rerouting of supply chains to countries perceived as politically and economically safe or low-risk, to avoid disruptions to the flow of business and supply chains.

Meeting with Vietnamese Prime Minister Pham Minh Chinh at the time, Yellen said: “The United States considers Vietnam a key partner in advancing a free and open Indo-Pacific.”

Cooperation agreements

During Putin’s visit on June 20, the Russian leader and his Vietnamese counterpart To Lam witnessed the signing of 11 cooperation agreements on education, nuclear technology research, disease prevention, oil exploration, and justice.

The agreements include cooperation on higher education; a cooperation programme for 2024-2025 between the justice ministries of the two countries; a memorandum of understanding on nuclear science and technology between Vietnam's Ministry of Science and Technology and Russia's Rosatom State Atomic Energy Corporation; and another MoU on cooperation in developing laboratory infrastructure to prevent and control diseases.

During the visit, Russia’s Zarubezhneft Group secured an adjusted investment registration certificate for an offshore oil and gas field on the Vietnamese continental shelf, Lot 11-2.

Zarubezhneft is currently engaged in production activities in offshore Vietnam both as part of the Vietsovpetro joint venture, its main production asset, and independently. Vietsovpetro’s headquarters is in Vung Tau City, about two hours’ drive from Ho Chi Minh City.

As of 2023, Vietnam was one of the top four largest oil-producing countries in Southeast Asia, along with Indonesia, Malaysia, and Brunei, according to Zarubezhneft.

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