Sources said the preliminary assessment of the block offered over two years ago had shown some elements of gas and oil.
However, subsequently, it came to notice that the bed of the block was very difficult and ONGC's overseas arm ONGC Videsh Limited has been seeking to exit from there, the sources said.
But Vietnam has been requesting OVL to continue its efforts.
"It became clear that cost does not match benefits. So, there is no work going on there," a source said, adding any operation can be undertaken only if it is "worth its while".
The exploration block was a cause of tiff between India and China about a year ago with Beijing protesting as it lays claim over entire South China Sea.
India has maintained there should be freedom in terms of international rules for navigation and exploitation of resources.
In the context of the issue, the recent comments by Naval Chief Admiral D K Joshi that India could send even its troops to South China Sea to protect its interests have not gone down well with the External Affairs Ministry. However, the MEA is not making an issue out of it, although it wants restraint by chiefs of forces.
Joshi had made the comments at a time when National Security Adviser Shivshanker Menon, India's Special Representative, was in Beijing hold talks on the boundary question with his counterpart Dai Bingguo.
The sources noted that the mechanism of Special Representative talks was useful in maintaining tranquality on the boundary even as there are different perceptions as to where the Line of Actual Control runs.
The LAC has never been formally designated but to ensure that there is no flare-up, the SR talks as also other such mechanisms of contact at the level of government and forces are used, the sources said.
In these meetings, issues of concern are raised by each side, they said. The Chinese side raises and "protests" any activity like road construction close to the boundary while India does the same whenever the troops from China "come very close" to the border.
Citing an incident of last year, the sources said India lodged one such protest, pointing out to the Chinese that it was not as per protocol that their troops came so close to the border.
On the latest round of talks Menon held in Beijing, the sources said it was informal SR talks and to touch the base with the new leadership of China.