Conoco: Little evidence of harm from Penglai 19-3 oil spills

Conoco: Little evidence of harm from Penglai 19-3 oil spills

BY WAYNE MA

BEIJING -- ConocoPhillips said Friday that it found little evidence of any environmental impact from June spills at its oil field in China's Bohai Bay.

Conoco said it tested the water around its drilling platforms at the Penglai 19-3 field and also conducted surveys of the shoreline.

Test samples revealed little, if any, correlation with the June accidents, which spilled 3,345 barrels of oil and oil-based drilling mud into the ocean, a spokesperson said.

More than 100 local fishermen filed a lawsuit Tuesday in a maritime court in Tianjin against Conoco asking the U.S.-based company to pay CNY490 million ($76.9 million) for killing clams and sea cucumbers, the official Xinhua news agency reported.

Last month, 200 local fishermen filed a civil lawsuit in Qingdai seeking CNY30 million, according to their lawyer.

However, a Conoco spokesperson said the company has yet to receive any lawsuits about the spills.

China's State Oceanic Administration harshly criticized what it said was negligent handling of the oil leaks.

In response, Conoco said it fully cooperated with the Chinese authorities investigating the leak and that it had learned "very important lessons."

Spills from the field were caused due to unexpected pressure encountered while drilling, it said.

The Penglai 19-3 oil field, which is operated by ConocoPhillips' China unit and 51%-owned by Cnooc Ltd. (CEO), was ordered by the SOA to halt production in early September because of the spills.

Since then, the field has operated at about a third of capacity as part of an effort to depressurize it.

Conoco has been waiting since late November for the Chinese government to approve a revised overall development plan before it can resume operations at the field.

The International Energy Agency has trimmed its forecast for China's crude output this year and in 2012 in part because of the loss in production, saying it could lead to an output decline of 50,000 barrels a day this year and 30,000 barrels a day in 2012.

Before the incidents, Conoco produced roughly 100,000 barrels a day of crude from the Penglai 19-3 field.

Conoco also said Friday that it would soon announce more details of two funds it established in the wake of the oil spills.

Although the dollar amount of either fund hasn't been revealed, one fund will be used for the environmental improvement of Bohai Bay, while the other will be used to compensate residents who have been impacted by the spills.

Dow Jones Newswires