In this file photo, the Haiyang Shiyou oil rig 981 is pictured in the South China Sea.
Associated Press

The Chinese oil rig at the centre of last year’s standoff between China and Vietnam over oil exploration in the South China Sea has completed drilling of a well not far from Vietnam’s coast, the official Xinhua News Agency said on Monday. Xinhua did not give coordinates for the well, but the China’s Maritime Safety Administration website earlier put the drilling site just over 100 nautical miles from the coast of Vietnam and 75 nautical miles south of the resort city of Sanya on China’s Hainan Island.

China claims most of the potentially energy-rich South China Sea, through which $5 trillion in ship-borne trade passes every year. The Philippines, Vietnam, Malaysia, Brunei and Taiwan also have overlapping claims. China’s deployment of the rig last year in what Vietnam considers its exclusive economic zone, about 120 nautical miles off its coast, led to the worst breakdown in relations since a brief border war in 1979.

The $1 billion deepwater rig, known as the Haiyang Shiyou 981, is owned by state-run China National Offshore Oil Corp.(CNOOC), China’s largest producer of offshore oil and gas. Xinhua, citing a company statement, said that the rig had completed China’s first high-temperature, high-pressure and deep water exploration well.