"China and Vietnam have reached many agreements regarding the settlement of maritime disputes, said Chinese Foreign Ministry spokesman Hong Lei, state-run news agency Xinhua reports.
"We hope Vietnam will respect these agreements and avoid taking any action that may complicate the matter."
China's challenge to Vietnam follows Hanoi's response to China National Offshore Oil Corp.'s announcement Saturday that it was making nine offshore oil blocks in the South China Sea available for joint operation with foreign companies.
China maintains it has sovereignty over all the South China Sea, while Vietnam asserts competing claims over parts of the sea, including the Spratly Islands. The disputed waters are also claimed in whole or in part by the Philippines, Taiwan, Brunei and Malaysia.
Vietnamese Foreign Ministry spokesman Luong Thanh Nghi Tuesday said that the area in which CNOOC called for international bidding "lies entirely within Viet Nam's 200-nautical mile exclusive economic zone and continental shelf in accordance with the 1982 U.N. Convention on the Law of the Sea," Vietnam News Agency reports.
"This is absolutely not a disputed area."
Oil reserves under the South China Sea are estimated at 160 billion-210 billion barrels with natural gas reserves of 16 trillion cubic meters.
With the latest China-Vietnam row, says Stephanie Kleine-Ahlbrandt, an analyst at the International Crisis Group in Beijing, South China Sea tensions were being "raised to a new level."
"This signals a change because CNOOC was unable to get approval before for exploration in so many disputed areas," she told the Financial Times. "It certainly puts companies exploring in this area with interests in both countries in a very difficult position."
Last month CNOOC launched its $839.9 million deep-water drilling rig in the South China Sea in an area between the Paracel Islands, claimed by both China and Vietnam, and the Macclesfield Bank, claimed by China and Taiwan.
CNOOC says the nine offshore blocks, announced Saturday, total more than 61,775 square miles.
The timing of that announcement came just two days after Vietnam's National Assembly passed the "Vietnamese Law of the Sea," which says that the Xisha Islands and Spratly Islands in the South China Sea are within Vietnam's sovereignty and jurisdiction.
Chinese Vice Foreign Minister Zhang Zhijun said the law infringes upon China's sovereignty, noting that China "strongly protests and firmly opposes such a move by Vietnam," Xinhua reports.