RECENT DEVELOPMENTS IN THE CHINESE ENERGY SECTOR

摘要

The US$1 billion oil rig at the centre of the dispute between China and Vietnam was towed out of the contested waters south of the Paracel Islands on July 15. While the Vietnamese Government welcomed the departure of the vessel, its relations with China remain strained and few expect the removal of the rig to signal the end of the dispute. China National Petroleum Corp (CNPC) announced that the rig's drilling activities had been "smoothly completed" and signs of oil and gas had been found. Some have speculated that the arrival of Typhoon Rammasun played a part in the early removal of the rig (almost one month ahead of schedule). While the early removal of the rig may not herald an immediate return to normal relations between the two nations, it reduces the likelihood of Vietnam launching a legal challenge against China and affords both governments a degree of breathing room.