Chinese rig moved from disputed waters

Disputed portions of South China Sea17 July 2014 – A Chinese oil rig has finished drilling near the disputed Paracel islands in the South China Sea after finding signs of oil and gas and is being moved away from the area, more than two months after its deployment damaged relations with Hanoi, a report said.

The Vietnamese coastguard said the $1-billion rig had been towed from contested waters. China’s official Xinhua news agency said the rig would be relocated off the southernmost island province of Hainan. It gave no timeframe.

The rig’s relocation could reduce tensions between the two neighbours after one of the worst breakdowns in ties since they fought a brief war in 1979.

Its movement toward Hainan was welcomed by Washington, which had criticised China’s decision to put the rig in waters disputed with Vietnam, calling it a “provocative” act.

US State Department spokeswoman Jen Psaki said the rig incident had “highlighted the need for claimants to clarify their claims in accordance with international law, (and) to reach a shared understanding on appropriate behavior and activities in disputed areas”.

She reiterated a US call for a voluntary freeze on “provocative unilateral actions” to allow for implementation of a 2002 agreement on maritime conduct.

Hanoi had said the rig was in its 200-nautical-mile exclusive economic zone and on its continental shelf. Beijing had said it was operating completely within its waters around the Paracel islands, which China occupies.

China National Petroleum Corporation (CNPC), the country’s dominant oil and gas producer, said the rig “smoothly completed” its drilling on Tuesday and found signs of oil and gas. The next step would be to analyse the geological data and evaluate the layers of oil and gas, it said.

China had previously said the rig was scheduled to explore the waters around the Paracels until mid-August. It was not clear why it had finished one month ahead of schedule, although Xinhua said July was the beginning of the typhoon season.

China’s popular Twitter-like microblogging service Weibo lit up with criticism of the move. Many people said the government had bowed to the United States, underscoring the domestic pressure Beijing faces to be tough in its territorial disputes.

But China’s Foreign Ministry said the decision was made in accordance with commercial decisions and had “no relation to any outside factor”.

Wu Shicun, president of the National Institute for South China Sea Studies, a Chinese government think tank on Hainan, said he believed the rig completed its work ahead of schedule because of good weather before the typhoon season began.

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