China rig finds gas after Vietnam sea standoff

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China rig finds gas after Vietnam sea standoff
SPRATLY ISLANDS, PHILIPPINES - AUGUST 02: (CHINA OUT, SOUTH KOREA OUT) The dilapidated Sierra Madre, a former U.S. tank landing ship, in Ayungin Shoal, as the Philippines' outpost against China in Spratly Islands on August 2, 2014 in Spratly Islands, Philippines. China, which has been flexing its military muscle in recent years to expand its maritime presence, is ratcheting up pressure at this particular site. The Philippines occupies nine islets and reefs in the Spratlys. But Ayungin Shoal is the only spot that is constantly exposed to the surveillance activities of Chinese patrol vessels. In 1995, Beijing upped the ante by erecting a structure in Mischief Reef, which is located in the Philippines' exclusive economic zone, calling it a 'shelter for fishing boats.' The Philippine military countered the move by deliberately running the Sierra Madre aground in Ayungin Shoal four years later as an outpost to keep the islands under its control. In South China Sea, Spratly Islands are disputed area, where China, Vietnam, the Philippines and Malaysia have claimed sovereignty. (Photo by The Asahi Shimbun via Getty Images)
SPRATLY ISLANDS, PHILIPPINES - AUGUST 06: (CHINA OUT, SOUTH KOREA OUT) The dilapidated Sierra Madre, a former U.S. tank landing ship, in Ayungin Shoal, as the Philippines' outpost against China in Spratly Islands on August 6, 2014 in Spratly Islands, Philippines. China, which has been flexing its military muscle in recent years to expand its maritime presence, is ratcheting up pressure at this particular site. The Philippines occupies nine islets and reefs in the Spratlys. But Ayungin Shoal is the only spot that is constantly exposed to the surveillance activities of Chinese patrol vessels. In 1995, Beijing upped the ante by erecting a structure in Mischief Reef, which is located in the Philippines' exclusive economic zone, calling it a 'shelter for fishing boats.' The Philippine military countered the move by deliberately running the Sierra Madre aground in Ayungin Shoal four years later as an outpost to keep the islands under its control. In South China Sea, Spratly Islands are disputed area, where China, Vietnam, the Philippines and Malaysia have claimed sovereignty. (Photo by The Asahi Shimbun via Getty Images)
SPRATLY ISLANDS, PHILIPPINES - AUGUST 06: (CHINA OUT, SOUTH KOREA OUT) The dilapidated Sierra Madre, a former U.S. tank landing ship, in Ayungin Shoal, as the Philippines' outpost against China in Spratly Islands on August 6, 2014 in Spratly Islands, Philippines. China, which has been flexing its military muscle in recent years to expand its maritime presence, is ratcheting up pressure at this particular site. The Philippines occupies nine islets and reefs in the Spratlys. But Ayungin Shoal is the only spot that is constantly exposed to the surveillance activities of Chinese patrol vessels. In 1995, Beijing upped the ante by erecting a structure in Mischief Reef, which is located in the Philippines' exclusive economic zone, calling it a 'shelter for fishing boats.' The Philippine military countered the move by deliberately running the Sierra Madre aground in Ayungin Shoal four years later as an outpost to keep the islands under its control. In South China Sea, Spratly Islands are disputed area, where China, Vietnam, the Philippines and Malaysia have claimed sovereignty. (Photo by The Asahi Shimbun via Getty Images)
SPRATLY ISLANDS, PHILIPPINES - AUGUST 06: (CHINA OUT, SOUTH KOREA OUT) Members of the Philippine Marine Corps stationed at the dilapidated Sierra Madre, hoist the Philippines national flag on August 4, 2014 in Spratly Islands, Philippines. China, which has been flexing its military muscle in recent years to expand its maritime presence, is ratcheting up pressure at this particular site. The Philippines occupies nine islets and reefs in the Spratlys. But Ayungin Shoal is the only spot that is constantly exposed to the surveillance activities of Chinese patrol vessels. In 1995, Beijing upped the ante by erecting a structure in Mischief Reef, which is located in the Philippines' exclusive economic zone, calling it a 'shelter for fishing boats.' The Philippine military countered the move by deliberately running the Sierra Madre aground in Ayungin Shoal four years later as an outpost to keep the islands under its control. In South China Sea, Spratly Islands are disputed area, where China, Vietnam, the Philippines and Malaysia have claimed sovereignty. (Photo by The Asahi Shimbun via Getty Images)
MAKATI, PHILIPPINES - 2014/06/12: A protester holding a poster against China's Nine Dash Line. Protesters from different groups held a protest rally in front of the Chinese embassy in Buendia, Makati against China's alleged aggressive moves around the South China Sea and the building of Chinese structures on islands within the Philippines exclusive economic zone. (Photo by J Gerard Seguia/Pacific Press/LightRocket via Getty Images)
A photographer takes picture of a map showing the position of the Chinese oil rig in the disputed waters at the South China Sea during a press conference in Hanoi on June 5, 2014 held by Vietnamese Foreign Ministry accusing Chinese ships of attacking Vietnamese vessels near to the site of the oil rig off Vietnam's central coast. China fired water cannon at a Vietnamese vessel and damaged another of Hanoi's ships, Chinese state media said on June 3, in the latest confrontation over disputed waters in the South China Sea. AFP PHOTO/HOANG DINH Nam (Photo credit should read HOANG DINH NAM/AFP/Getty Images)
This video grab image taken on June 1, 2014 from Vietnam Coast Guard ship 2016 and released on June 5, 2014 shows the Chinese Coast Guard ship 46001 (L) chasing a Vietnamese vessel near to the site of the Chinese oil rig in the disputed waters in the South China Sea, off Vietnam's central coast. China fired water cannon at a Vietnamese vessel and damaged another of Hanoi's ships, Chinese state media said on June 3, in the latest confrontation over disputed waters in the South China Sea. AFP PHOTO/Vietnam Coast Guard == RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT 'AFP PHOTO / Vietnam Coast Guard - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS == (Photo credit should read STR/AFP/Getty Images)
An elderly Vietnamese protester holds a placard during an anti-China protest in front of the Chinese consulate in the financial district of Manila on May 16, 2014. Several hundred Filipino and Vietnamese protesters united in a march in the Philippine capital on May 16, demanding that China stop oil drilling in disputed South China Sea waters. AFP PHOTO/TED ALJIBE (Photo credit should read TED ALJIBE/AFP/Getty Images)
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By IAN MADER

BEIJING (AP) - The Chinese exploration rig at the center of a tense maritime standoff with Vietnam earlier this year has made its first deep sea gas discovery in the politically volatile South China Sea, state media announced Tuesday.

The discovery by China National Offshore Oil Corp. was made about a month after its rig withdrew in July from Vietnam's exclusive economic zone to far less-contested waters closer to China.

The find by CNOOC's two-year-old, $1 billion deep sea rig is about 150 kilometers south of China's southernmost island of Hainan. It's unclear whether the discovery will become commercially viable, but the announcement represents a significant step in China's ability to seek resources beneath the South China Sea.

Petroleum reserves and fisheries are among the resources at stake in disputes over the sea, which is one of the world's busiest shipping routes and a patchwork of overlapping claims by governments including China, the Philippines, Malaysia, Vietnam and Taiwan. China claims virtually all of the South China Sea.

The find was China's first without the participation of foreign partners that in the past have included companies such as Chevron and BP, said Felix Tan, a Beijing-based analyst for energy and resources consultant Wood MacKenzie.

"This is the first discovery they've done all by themselves," Tan said in an interview. CNOOC has rapidly developed a deep-water exploration capability, he said.

"It's a bit premature to talk about the viability" of the field, however, Tan said. "There are a lot of tests to be done."

The gas field was discovered Aug. 18 at a depth of about 1,500 meters, CNOOC said on its website.

The depth is at the extreme cusp of what the industry considers a deep-water field, or those from 400 to 1,500 meters. Below 1,500 meters would be ultra-deep, where extraordinary pressures make the building of facilities extremely difficult.

Xinhua said the field's viability is still to be proven, but quoted a CNOOC manager, Xie Yuhong, as saying the well could be capable of producing up to 56.5 million cubic feet of gas per day, or about 9,400 barrels.

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