China says oil leak under control, ConocoPhillips to blame

An oil leak last month from China’s largest offshore oilfield was the fault of the field’s operator ConocoPhillips and the U.S. firm will take the blame for the accident, the China State Oceanic Administration said on Tuesday.

China says oil leak under control, ConocoPhillips to blame

The leak from platforms B and C of the Penglai 19-3 oilfield in the northern Bohai Bay, which started on June 4 and June 17 respectively, polluted 840 square kilometres of water, said Li Xiaoming, the administration’s environmental protection head.

As of Monday, some 70 cubic metres of oil and water mixture had been cleaned up and there were no obvious signs of oil floating on the sea, though a small oil slick could still be seen near the two platforms, Li told a news conference.

A preliminary investigation showed the leak was caused because water injected down the pipe used to drill for oil increased pressure in the oil-bearing strata in the sea bed, he said.

The Penglai 19-3 field has five production platforms, with total daily production of roughly 160,000 barrels.

ConocoPhillips has a 49 percent stake in the project while China’s CNOOC Ltd has the remainder.

According to the law, ConocoPhillips China, which operates the oilfield, will take responsibility for the accident, added Wang Bin, deputy head of the administration’s environmental protection department.

ConocoPhillis could be fined up to 200,000 yuan ($30,946) for the accident, according to law. But Wang said the company would probably have to pay out much more in compensations for ecological and economic damage caused.

ConocoPhillips China and CNOOC confirmed last week that there had been an oil leak, but that it was under control and had basically already been cleaned up.

Penglai crude is a heavy grade used mostly to feed the Huizhou refinery in China’s southern province of Guangdong, which is owned by CNOOC Ltd’s parent.

The field has a 2 million-barrel floating, production, storage and offloading facility, the largest in China, which normally can provide a supply cushion in case of an emergency production shutdown.

Reuters

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