Vietnam has offered to extend India's contract for a gas block in the South China Sea for two more years, raising the prospect of India getting embroiled in territorial disputes in the region with China.

Earlier, India's state-owned ONGC Videsh Ltd (OVL) decided to quit the disputed Block 128 after their surveys showed that there was little hope of finding gas in that area. Seeking to hold on to an Indian presence in the resource-rich South China Sea, which is witnessing increasing Chinese assertiveness, as the Press Trust of India reported, Vietnam's national oil company, PetroVietnam, had offered to share new geological data that might point to the presence of substantial amounts of gas in that block.

OVL has accepted the offer, and will continue oil and gas exploration in the Block 128 area, according to Hindustan Times. 

Madhav Nalapat, director of the School of Geopolitics at Manipal University in India, believes that as the relations between India and China are not smooth, India cannot "put all the South China Sea eggs in the China basket."

"The region is too rich in resources for India to ignore. Hence India will adopt a strategy of using 'different baskets,' such as Vietnam and other countries with coastlines on the South China Sea in order to gain access to oil and other seabed resources," he told the Global Times.

China has restated its territorial sovereignty over the South China Sea, while Vietnam has claimed all the gas blocks that fall in its exclusive economic zone.

Earlier this month, China's State-owned oil firm China National Offshore Oil Corporation called for bids from foreign companies offering oil exploration opportunities in nine blocks in the South China Sea, sparking protests from Hanoi.

Wang Dehua, director of the Institute of South Asia and Central Asia Studies at the Shanghai Municipal Center for International Studies, says it's natural for Vietnam to want to hold on to its vested interests, but wooing other countries will make disputes around the South China Sea more complicated.

According to Reuters, Indonesia, the biggest country in ASEAN and one seen as neutral given it has no claim in the disputed waters, has taken on the role of mediator backed by both the Philippines and Vietnam, which are pushing ahead with a South China Sea code of conduct.

For the first time in its history, the 10-nation group did not agree on a concluding joint statement at a ministerial meeting last week due to the complexity of the issue.

Agencies contributed to this story