India is likely to withdraw from oil block No 128 in the South China Sea after gas and oil did not show up in an exploratory well, and officials have conveyed to Vietnam plans to terminate operations based "on commercial considerations", Indian media reported.

In 2006, Vietnam assigned oil block No 127 and No 128 to an Indian oil gas company named ONGC Videsh Ltd, the global arm of the state-owned Oil and Natural Gas Corp.

Despite objections from the Chinese government, the company began production tests in September 2009.