China: Rig Not Drilling in Disputed Waters

In mid-2014, rig caused worst breakdown in ties in decades.

China's Foreign Ministry said on Wednesday that a $1-billion deepwater oil rig was not drilling in disputed territory in the South China Sea, in response to a warning from Vietnam against such activity.

Vietnam closely tracks the movement of the oil rig, which in mid-2014 caused the worst diplomatic breakdown between the neighbours in decades, when China parked it for 10 weeks in waters Vietnam considers its own.

This week Vietnam said Beijing had steered the rig, the Haiyang Shiyou 981, into a stretch where jurisdiction is unclear.

"According to what is understood, China's Haiyang Shiyou 981 drilling platform is operating in Chinese-controlled waters that are completely undisputed," Chinese Foreign Ministry spokesman Hong Lei told a daily news briefing.

"We hope the Vietnamese side can view this calmly, meet China half way and jointly work hard to appropriately handle relevant maritime issues."

Annual trade between the communist neighbours exceeds $60 billion but anti-China sentiment is strong in Vietnam, where people are embittered over what many see as a history of Chinese bullying and territorial infringements in the South China Sea.

China's Maritime Safety Administration said on Wednesday it would be drilling roughly 140 km (87 miles) south of the resort city Sanya on China's Hainan island, and 150 km (93 miles) west of the Paracel Islands that China occupies and Vietnam claims.

It is 210 km (130 miles) from the coast of Vietnam, which places it in roughly the same area as between June and October 2015.

The agency said it would be operating there until March 10 and warned ships to stay 2,000 m (6,562 ft) away.

China Oilfield Services Ltd (COSL), a subsidiary of China National Offshore Oil Corporation (CNOOC), manages the platform and rents it out.

Neither COSL nor oil giant China National Petroleum Corporation (CNPC) - which leased the platform in 2014 amid the previous dispute - answered telephone calls to seek comment.

PetroChina (PCCYF), the flagship subsidiary of CNPC, said it was not aware who was currently leasing the platform.

In 2014, China's deployment of the rig about 120 nautical miles off Vietnam's coast, in what Vietnam considers its exclusive economic zone, led to the worst breakdown in relations since a brief border war in 1979.

Vietnam's concern over the rig follows its complaints, echoed by the Philippines, over China's recent test flights on an artificial island in the disputed Spratly archipelago.

China considers most of the South China Sea to be under its jurisdiction but Brunei, Malaysia, the Philippines, Taiwan and Vietnam have competing claims. About $5 trillion in ship-borne trade passes through the waters each year. (Reporting by Ben Blanchard and Adam Rose