Chinese ships are seen on the horizon guarding the Haiyang Shiyou 981, known in Vietnam as HD-981, oil rig (2nd R) in the South China Sea, July 15, 2014. REUTERS/Martin Petty Thomson Reuters

Chinese ships are seen on the horizon guarding the Haiyang Shiyou 981, known in Vietnam as HD-981, oil rig in the South China Sea

A Chinese oil rig at the center of last year's standoff between China and Vietnam will continue drilling not far from Vietnam's coast, China's maritime safety authorities said on Tuesday.

The deployment of the $1 billion deepwater rig last year about 120 nautical miles off Vietnam's coast, in what Vietnam considers its exclusive economic zone (EEZ), led to the worst breakdown in relations since a brief border war in 1979.

China said at the time the rig was operating completely within its waters.

The rig, called the Haiyang Shiyou 981, was removed last July, but returned to the area in June of this year to explore for oil and gas. A notice from China's Maritime Safety Administration said at the time that the rig would carry out "ocean drilling operations" until Aug. 20.

In a new notice posted on its website, the Maritime Safety Administration said that the rig will continue drilling at a position slightly to the north until Oct. 20. Read more

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