But State Department official Scot Marciel said the United States would not take sides on the myriad island disputes involving China and its neighbours including Japan, the Philippines and Vietnam.

Testifying before Congress, Marciel said that Beijing has told US and other foreign oil companies to halt work with Vietnamese partners in the South China Sea or face consequences in their business dealings in lucrative China.

"We object to any effort to intimidate US companies," Marciel, a deputy assistant secretary of state handling Asia, told the Senate Foreign Relations Committee.

Agence France Presse - July 17, 2009