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China's state-owned CNOOC is preparing to auction off oil and gas blocks to foreign companies near disputed waters claimed by Vietnam and Japan.

In a second round of auctions planned for later this year, China is offering up 26 blocks some 30 miles off the coast of the Paracel Islands in the South China Sea. A block in the same vicinity last year sparked the ire of Vietnam. 

China is rushing now to assert its sovereignty over these oil and gas blocks before their development potential becomes solidified.

In June, Vietnam passed a maritime law in its own move to assert control over the islands in the South China Sea. At the same time, China has set plans in motion for a military outpost on one of the islands.

As far as Japan is concerned, one particular block on offer off the coast of Diaoyu/Senkaku Island will bring Beijing and Tokyo to loggerheads. It was here in 2010 that the two countries clashed over fishing rights, leading to a months-long diplomatic dispute.