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By Ernest Bower and Gregory Polling

07 May 14. Tensions between China and Vietnam over the disputed South China Sea are at their highest levels in years. On May 2, the state-owned China National Offshore Oil Corporation (CNOOC) placed its deep sea drilling rig HD-981 in disputed waters south of the Paracel Islands. Vietnam objected to the placement, declaring that the rig is located on its continental shelf. China has since sent approximately 80 ships, including seven military vessels, along with aircraft to support the rig. In response, Hanoi dispatched 29 ships to attempt to disrupt the rig’s placement and operations.

The situation escalated dramatically on May 7, when Vietnam accused Chinese vessels of turning high powered water cannons on the Vietnamese ships and eventually ramming several vessels. The incidents reportedly left six Vietnamese injured and several of the country’s ships damaged. Hanoi released photos and videos of the incidents to support its claims.
The implications of these developments are significant. The fact that the Chinese moved ahead in placing their rig immediately after President Obama’s visit to four Asian countries in late April underlines Beijing’s commitment to test the resolve of Vietnam, its ASEAN neighbors and Washington. Beijing may also be attempting to substantially change the facts on the seas by moving while it perceives Washington to be distracted by Russian aggression inUkraine, developments in Nigeria, and Syria. If China believes Washington is distracted, in an increasingly insular and isolationist mood and unwilling to back up relatively strong security assertions made to Japan and the Philippines and repeated during President Obama’s trip, these developments south of the Paracel Islands could have long term regional and global consequences.

Q1: Where is the rig, really?

A1: The war of words between Beijing and Hanoi has largely focused on the status of the area where HD-981 was placed. Vietnamese officials insist that it lies on their continental shelf, where according to the UN Convention on the Law of the Seas (UNCLOS), Vietnam has exclusive rights to all mineral and hydrocarbon resources.

The rig was placed near the edge of two hydrocarbon blocks already created by Hanoi, though not yet offered for exploitation to foreign oil and gas companies. It also sits near blocks 118 and 119, where U.S.-based ExxonMobil discovered substantial oil and gas reserves in 2011 and 2012. In 2013, Exxon and Vietnam’s state-owned PetroVietnam announced plans to build a $20 billion power plant to be fueled by the oil and gas from those blocks. Those discoveries help explain why CNOOC chose to place HD-981 nearby.

China’s Ministry of Foreign Affairs has responded to Vietnam’s complaints by insisting that the rig was placed “completely within the waters of China’s Paracel Islands.” This presumably refers to the 200 nautical mile exclusive economic zone and continental shelf that those islands—which are occupied by China but claimed by Vietnam—would generate under UNCLOS if they met certain requirements.

HD-981 was placed at 15°29’58’’ north latitude and 111°12’06’’ east longitude. It is about 120 nautical miles east of Vietnam’s Ly Son Island and 180 nautical miles south of China’s Hainan Island—the two nearest features that indisputably generate a continental shelf. As such, it not only sits on Vietnam’s claimed extended continental shelf, but also well on the Vietnamese side of any median line that might be negotiated between the two shelves from the Chinese and Vietnamese coasts, as indicated by the white lines in the map below.

Q2: Who is in the right?

A2: China’s Ministry of Foreign Affairs appears to be basing its case on the assumption that Triton Island, 17 miles to the north of HD-981, or another of the Paracels meets the UNCLOS habitability requirement for generating its own

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