China moves oil rig from contested waters

Beijing claims move due to work completion, not external pressure

HONG KONG/HANOI - A Chinese oil company has completed drilling in disputed waters off the coast of Vietnam and moved a rig that sparked skirmishes between boats of the two countries and deadly anti-Chinese riots in Vietnam.

The HYSY 981 rig completed drilling off Zhongjian Island in the Xisha Islands, as the Paracel Islands are known in Chinese, on Tuesday, China Oilfield Services - owned by state-owned China National Offshore Oil Corp - said in a statement. Oil and gas resources were detected, according to China National Petroleum Corp, which managed the project.

The move comes one month ahead of the schedule announced by China Oilfield Services in late May. The rig will be deployed in the Lingshui blocks near China's Hainan Island, it said.

The rig was towed from its original position overnight to beyond what Hanoi considers its exclusive economic zone, Lieutenant-Colonel Ngo Minh Tung of the Vietnamese coast guard told a small group of reporters.

"According to our assessment and the speed at which it was moving, the rig has left Vietnamese waters," Lt-Col Tung said.

Vietnamese newspaper Tuoi Tre, quoting Vietnam Coast Guard Commander Nguyen Quang Dam, said China had also reduced the number of vessels deployed to protect the rig.

The moving of the structure has sparked criticism on China's popular Twitter-like microblogging service Weibo, where many said Beijing had bowed to the United States, underscoring the domestic pressure China faces to be tough in its territorial disputes.

Beijing's claim to almost all of the South China Sea is disputed by several of its South-east Asian neighbours.

But China's Foreign Ministry said the move was made in accordance with commercial decisions and had "no relation to any outside factor". The government also reiterated China's stance that the project had taken place within the country's "inherent territory" and has as recently as Tuesday told Washington to stay out of quarrels over the South China Sea.

The departure of the rig may not mend ties with Vietnam, said Professor Le Hong Hiep, a lecturer at Vietnam National University in Ho Chi Minh City, as Hanoi no longer views China as a friendly ideological partner and may seek alliances with countries such as the Philippines, Japan and even the US. "All the top leaders of Vietnam have spoken out against China," he said. "Vietnam will move to be more assertive to counter China's aggressive actions in the South China Sea."

China towed the rig into the contested waters on May 2, prompting protests from Vietnam, which said it lay in its exclusive economic zone. The countries traded accusations that boats from the other side had rammed their vessels hundreds of times.

China, which claims a large part of the South China Sea under a 1940s-era map, has stepped up its assertions to both the Paracel Islands and the more southerly Spratly Islands.

Mr Wu Shicun, president of the National Institute for South China Sea Studies, said he believed the rig completed its work ahead of schedule because of good weather before the typhoon season began.

Vietnam demands that China should never move rigs to the waters or any area belonging to Vietnam, Foreign Ministry spokesman Le Hai Binh said yesterday.

"Vietnam expects to solve disputes, disagreements on the South China Sea through negotiations based on international laws," he said.

BLOOMBERG, AGENCE FRANCE-PRESSE, REUTERS