Controversial China Rig Completes Drilling Well Near Vietnam Coast

Source: Reuters 8/24/2015, Location: Asia

The Chinese oil rig at the centre of last year's standoff between China and Vietnam over oil exploration in the South China Sea has completed drilling of a well not far from Vietnam's coast, the official Xinhua News Agency said.

Xinhua did not give coordinates for the well, but the China's Maritime Safety Administration website earlier put the drilling site just over 100 nautical miles from the coast of Vietnam and 75 nautical miles south of the resort city of Sanya on China's Hainan Island.

China claims most of the potentially energy-rich South China Sea, through which $5 trillion in ship-borne trade passes every year. The Philippines, Vietnam, Malaysia, Brunei and Taiwan also have overlapping claims.

China's deployment of the rig last year in what Vietnam considers its exclusive economic zone, about 120 nautical miles off its coast, led to the worst breakdown in relations since a brief border war in 1979.

The $1 billion deepwater rig, known as the Haiyang Shiyou 981, is owned by state-run China National Offshore Oil Corp.(CNOOC), China's largest producer of offshore oil and gas.

Xinhua, citing a company statement, said that the rig had completed China's first high-temperature, high-pressure and deep water exploration well.

A statement could not be found on the company's website or that of its flagship listed unit, CNOOC Ltd. A spokesperson could not immediately be reached.

Vietnam and China agreed on an equal split of their maritime boundary of the Gulf of Tonkin in 2000 but have yet to agree on demarcating waters further south, near the well's site.

Vietnam's people remain embittered over a perceived history of Chinese bullying and territorial claims in the South China Sea, although China said at the time the rig was operating completely within its waters.

China has also clashed with the Philippines in recent years over a disputed shoal that China seized in 2012.

On Monday, China's foreign ministry again condemned an arbitration case initiated by Philippines, saying it was a violation of previous commitments to handle to dispute bilaterally and an abuse of the legal system.

China has for years insisted that disputes with rival claimants to the South China Sea be handled bilaterally and has refused to take part in the Philippines case.

But last month, its claims came under international legal scrutiny for the first time when the Permanent Court of Arbitration in The Hague began hearing a suit the Philippines filed in 2013

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