China Oilfield Services to Continue Drilling in South China Sea

China Oilfield Services Ltd. (2883), which is drilling exploration wells in the disputed waters of the South China Sea, said it completed the first phase of operations and will go on to the next.

Platform HYSY981 has moved to “another location” to begin the second phase, the company known as COSL, said in a newsletter posted on its website today, without giving specifics. COSL started drilling in the area on May 2 and is expected to finish by mid-August, according to the statement.

The company, under contract from its state-owned parent China National Offshore Oil Corp., this month placed an oil rig near the disputed Paracel Islands off the coast of Vietnam, leading to confrontations between Vietnamese and Chinese boats. The move set off violent anti-China protests in Vietnam and prompted China to evacuate thousands of its citizens from the South East Asian country.

A Chinese vessel attacked and sank a Vietnamese fishing boat yesterday, Vietnam’s foreign affairs spokesman Le Hai Binh said. Ten fishermen on board the vessel were rescued by other Vietnamese boats in the incident yesterday around 17 nautical miles (31 kilometers) from the Chinese oil rig.

Wang Yilin, chairman of China National Offshore, said in Hong Kong on May 23 that the company is determined to finish drilling in the waters.

Drilling in the South China Sea is a business decision, Wang told reporters in Hong Kong after the annual shareholder meeting of its listed unit, Cnooc Ltd. (883), of which he is also chairman. Cnooc’s parent will oppose Vietnamese disruptions to drilling, he said, adding that he expects the operation there to be protected by the Chinese government.

To contact the reporter on this story: Aibing Guo in Hong Kong at

To contact the editors responsible for this story: Jason Rogers at Abhay Singh, Indranil Ghosh

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