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Chinese oil rig moved away from disputed waters off Vietnam

Published on Jul 17, 2014 3:45 AM

SHANGHAI/HANOI (Reuters) - 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.

The Vietnamese coastguard said the US$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.

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