So, another maritime incident between China and one of its neighbours.

There are reports from officials in Hanoi that Chinese and Vietnamese vessels collided on at least two separate occasions in the South China Sea on Sunday, in waters 120nm off the Vietnamese coast. The dispute began last Saturday when China's Maritime Safety Authority (MSA) announced that the drilling rig Haiyang Shiyou 981, owned by China National Offshore Oil Corporation (CNOOC), would undertake drilling work in the South China Sea. The MSA announced an exclusion zone around the platform for any vessels unrelated to its operations.

Unsurprisingly, Vietnam reacted strongly, sending a fleet of coast guard and naval vessels to stop the rig establishing a fixed position in what it regards as Vietnamese waters. A fleet of up to 40 Chinese vessels (reportedly including naval vessels) was accompanying the rig, and the standoff and collisions ensued. 

At least three issues relating to this incident merit further consideration.

Firstly, there is a possibility that this standoff could last for months (or longer). The Banyan blog at The Economist rightly notes that this incident is more serious than other recent flare-ups, which involved fishing and oil survey vessels. This is believed to be the first time China has actually drilled for oil in waters claimed by Vietnam.

Unlike fishing and survey vessels, drilling platforms, while moveable, tend to stay in one location for long periods. In fact, the MSA announcement said drilling would continue in the same location until 15 August. If CNOOC does fix the rig in place, the MSA announcement reduces the likelihood that the rig will be removed before that date. At that stage, a relocation of the rig could be face-savingly described as a completion of drilling operations, though of course there is no guarantee China would remove the platform at that point.

From a Vietnamese perspective, in the short term this would seem to be a binary situation. Either CNOOC establishes a fixed location for its billion dollar rig in Vietnamese-claimed territory, or it doesn't.

The removal of the rig in August might be barely palatable for Hanoi, but there is no way Vietnam can guarantee the rig will actually be relocated at that time. As such, it could be drawn into a game of cat and mouse in waters near the rig against much stronger Chinese maritime and/or naval forces.

Secondly, although the decision to move the rig to disputed waters uncannily follows on from Obama's recent Asia visit, the two activities are not necessarily related. Obama's Asia visit did not include a stop in Hanoi, yet countries that Obama actually did visit haven't suffered a similar backlash. Yes, China and Russia will be holding a joint naval drill in the East China Sea, which could be seen as a response to Obama's Japan visit. But there have also been positive signs for Japan-China relations both before and since Obama's visit.

Finally, CNOOC has a history of conflating resource exploration in the South China Sea with sovereignty claims. Large state-owned enterprises like CNOOC are powerful players in Beijing, and CNOOC could be one of the drivers behind the decision to move the drilling rig into disputed waters. At the very least, it would actively support the rig being used as a tool in sovereignty disputes.  

CNOOC has a track record of involving itself in sovereignty issues in the South China Sea. In 2012, the company offered nine oil and gas blocks for bidding by foreign companies in an area almost completely within Vietnam's exclusive economic zone. CNOOC also provides optimistic hydrocarbon estimates in the South China Sea. One could assume this is an attempt to win policy and financial support from the central government for activities such as the building of deep water drilling rigs like Haiyang Shiyou 981.

This rig, launched in 2012, gives CNOOC the capability to drill to depths of 3000m, greatly expanding the areas in the South China Sea that CNOOC can drill without relying on foreign companies. Chairman Wang Yilin has been quoted saying that 'large deepwater drilling rigs are our mobile national territory and strategic weapon for promoting the development of the country's offshore oil industry.'