China Foreign Minister spokeswoman Hua Chunying said Monday CNOOC was working "completely within the area belonging to [the Chinese government]," though the claims were disputed by Vietnam.
China's Maritime Safety Administration said Saturday the CNOOC rig was located in the South China Sea near the Xisha Islands.
Vietnamese Foreign Ministry spokesman Le Hai Binh said the territory was in his country's exclusive economic zone.
"All activities by a foreign entity in Vietnamese waters without Vietnam's consent are illegal and invalid, and Vietnam strongly protests [such activities]," he said in a statement Sunday.
Territory in the South China Sea has been a source of dispute between China and many of its neighbors in the Asia-Pacific region.
In March, CNOOC announced it started production in the Liwan gas field in the South China Sea alongside Husky Energy, a Canadian company.
Combined, total gas sales from the area should reach 500 million cubic feet per day once all programs go online by 2017.