China holds US company to account for oil spill

Shanghai Daily, July 6, 2011

The oil leaks in the Bohai Bay last month polluted an area of 840 square kilometers in the sea and US company ConocoPhillips should be held accountable for the incidents, China's ocean authorities said.

The spills have caused "a certain level" of damage to the marine environment, the State Oceanic Administration said yesterday, one month after the leak occurred.

A total of 70 cubic meters of water-oil hybrid had been recovered as of Monday, it said.

Earlier reports said dead fish had been found near the site of the spills from the Penglai 19-3 field, though it has not been confirmed whether the deaths were caused by oil.

Oil first spilled from Platform B of the field on June 4. A larger leak then occurred on June 17 at Platform C, according to the administration.

The spills were under control and the leakage had been largely cleaned up, said officials.

The Penglai 19-3 field is 51 percent owned by Beijing-based CNOOC Ltd and 49 percent by Conoco.

The oceanic administration said Conoco should be held accountable for the incident because it's the operator of the field.

Conoco could not be reached for comment yesterday.

Guo Mingke, vice director of the SOA's North Sea branch, said Conoco faces a maximum fine of 200,000 yuan (US$30,920) under Chinese environmental protection law.

This has triggered a public outcry online, with web users saying the fine is nothing to an organization that is the third largest integrated energy company in the US.

"How is a fine as low as this going to alarm this troublemaker?" Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, wrote on his microblog.

In February, Chevron Corp, another US oil major, was fined US$9.5 billion by a court in Ecuador for oil drilling contamination in the Amazon rainforest, following a marathon case that lasted 18 years.

The Penglai oil spills only came to light on June 21, when claims were posted online anonymously.

They were only confirmed by CNOOC last Friday after they made the headlines.

The authorities yesterday tried to explain why they took so long to acknowledge the incidents.

Li Xiaoming, director of the SOA's marine environment department, said this was the first undersea oil spill in China, so it would take a relatively long time to reach conclusions.

However, local fishery and environmental agencies around Bohai Bay had been informed after the first spill, said Li.

The Platform B leak resulted from increased formation pressure after workers injected water into the strata, while the Platform C leak was caused by a surge in the well, coupled with leaks on the side, the ocean agency said.

Penglai 19-3 was discovered in May 1999 through a joint effort of CNOOC and Conoco. Production first began in December 2002.

Meanwhile, Chinese media, including the China Business News, have reported that CNOOC tried to cover up several other oil leaks in the past.

These included a spill from CNOOC's platform in the Bozhong 34-1 field in Bohai Bay in May this year and a leakage from a pipeline that links an offshore oil field with Hainan Province. This polluted a small reservoir there in September 2009.

CNOOC is reported to have said that these incidents were not on the same scale as the Penglai case.