OIL in the South China Sea is one of the few bright spots for United States business in Vietnam. And even that may be flickering, Western and Vietnamese analysts say.
"I think it will be perhaps a little late for the Americans to come back," says Nguyen Xuan Oanh, central banker for the former South Vietnam and now advisor to the ruling communists. "The embargo has damaged the American businessman very much."
"Japan already has the place wired," says a Western diplomat about the foothold Japan has taken in the market despite the embargo.
Meanwhile US firms - including Mobil Oil Company, which first discovered oil offshore in the waning days of the Vietnam War - were left out of bidding in February for exploration rights in Dai Hung, Vietnam's biggest oil field, with oil reserves estimated at 500 million barrels.
Hanoi, which has 11 production-sharing contracts, agreed in principle to grant exploration rights to firms from Europe, Japan, and South Korea on five southern offshore blocks. Concessions on five other blocs are expected by May.
Sitting in his offices in the abandoned US Embassy compound here, Do Dinh Luyen, deputy general director of the state oil company, PetroVietnam, says a stream of US oil executives urged Vietnam to hold back some plots.
"Executives of American companies have sat across the table here and said, 'Save some for us,' " he says, explaining that Vietnam is keen to have the US back to boost competition. "But, as you say in your country, 'Time is money.' "
Oil and gas exploration is a keystone to Vietnam's economic recovery, analysts say. They estimate oil production capacity at 500,000 barrels per day within two decades. More than half of current production, projected to climb from 75,000 to 95,000 b.p.d. this year, goes to Japan.
Despite the international rush for one of the world's last oil frontiers, results have been disappointing. Oil companies spent $300 million on exploration in the last three years but scored no major find.