China National Offshore Oil Company (CNOOC), parent company of China's largest offshore oil producer, CNOOC Ltd. ( CEO - Analyst Report ) has brought its rig – Offshore Oil 981 – back in service in a South China Sea gas field. The rig has resumed work at Liwan 3-1 gas field, after almost two months of repair.

The $1 billion deepsea drilling rig is the first of its kind that was designed and constructed in China. The rig was being leased by Canada's Husky Energy, operator of the Liwan project in the western part of South China Sea, considered as a massive offshore gas find.

The minor leaks in the rig, noticed during the routine checks in one of the water pump rooms on Dec 31, 2012 was caused possibly due to the discharge of structural pressure in the initial days of the rig's operation. The final analysis for the leaks was not revealed by the company.

Per the industry officials with knowledge of the matter, the cracks were found in one of the rig's four steel columns. The cracks, which could be due to steel problems or design faults, led to water leakage. The leaks are now sealed and the maintenance work complete.

The rig, which was brought online in May 2012, was committed to exploring the South China Sea, in which China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei have common interests. The rig has also spud numerous deepwater wells for CNOOC since it began operations and prior to being contracted by Husky. Though CNOOC owns the rig, it is operated by China Oilfield Services.

The rig has a length of 114 meters with a capacity to operate in maximum water depth of 3,000 meters and maximum drilling depth of 10,000 meters.

CNOOC carries a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, there are other stocks in the oil and gas sector – Memorial Production Partners LP ( MEMP - Snapshot Report ) , Calumet Specialty Products Partners L.P. ( CLMT - Snapshot Report ) and EPL Oil & Gas, Inc ( EPL - Snapshot Report ) – which hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.