The $1 billion deepwater rig was deployed last year amid cries of outrage from the Vietnamese government. Haiyang Shiyou 981, owned by China National Offshore Oil Corp. (CNOOC), is located approximately 100 nautical miles east of Vietnam, and 75 nautical miles south of China’s Hainan Island in the South China Sea.
That rig has now completed its first deep-water exploration well, according to Xinhua News Agency.
Vietnam considers the waters to be within its exclusive economic zone, but China maintains it is respecting agreed upon borders established in 2000.
A highly disputed waterway through which roughly $5 trillion in trade passes each year, the South China Sea has seen its share of clashes in the last few years. While China lays claim to most of the region, there are overlapping claims by Malaysia, Brunei, Taiwan, the Philippines, and Vietnam.
Hanoi was also outraged last month as Beijing announced the launch of a new cruise ship link to the Paracel Islands. Located in the same disputed stretch of water between Vietnam and Hainan, the islands are claimed by both governments.
Beijing has been converting the island chain into a tourist destination for Chinese citizens since 2013. The growing demand has led the government to develop infrastructure in the Paracels.
The territorial conflicts between China and Vietnam are, of course, only a fraction of the disputes currently underway in the South China Sea. Beijing’s construction of artificial islands in the Spratly archipelago has also caused protests from rival claimants.
While China has maintained that it has every right to build within its own territory, and that the islands will be used primarily for humanitarian purposes, the United States has called the project a breach of international law.
A recent Pentagon report accused China of seeking “a more robust power projection presence” in the region.
"China is unilaterally altering the physical status quo in the region, thereby complicating diplomatic initiatives that could lower tensions," the report reads.
In response to the Pentagon’s report, Zhu Haiquan, the Chinese embassy spokesperson in Washington, assured the US that its activities in the South China Sea will serve a broader, public good.
"China stands ready to pen these facilities to other countries upon completion," Mr. Zhu said.
The report also made little mention of Vietnam’s construction of islands in the South China Sea