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China oil spill faces more scrutiny
by Staff Writers
Beijing (UPI) Sep 8, 2011

China has called for a thorough investigation into the spill at a Bohai Bay oilfield run by ConocoPhillips.

"Parties responsible for the accident must be made to contain the spill, clean up the mess and substantially alleviate the damages caused by pollution," the State Council, or Cabinet, said in a statement Wednesday.

"The cause of the accident must be identified, damage and losses must be defined, and those responsible must be punished according to the law."

China's decision follows the State Oceanic Administration's order last week to halt operations in Penglai 19-3, which is jointly owned by ConocoPhillips, with a 49 percent stake, and China National Offshore Oil Corp., with a 51 percent stake.

The spill covers an area of at least 2,125 square miles, SOA says.

ConocoPhillips said it would comply with the shut down, noting that it would have an impact on production from the field, one of China's largest. Penglai 19-3 averaged approximately 56,000 net barrels of crude oil per day in 2010, representing approximately 3 percent of the company's annual production.

ConocoPhillips said Wednesday it would establish a fund that will be "designed to address ConocoPhillips' responsibilities in accordance with relevant laws of China and to benefit the general environment in Bohai Bay." The company didn't specify the value of the fund.

"ConocoPhillips deeply regrets these incidents and apologizes for the impact that the incidents have had on the Chinese people and the environment," James Mulva, chairman and chief executive officer of ConocoPhillips, said in a statement.

But Beijing's response to the spill is seen as being harsh compared to last year's massive spill in Darian at a refinery co-owned by China National Petroleum Corporation in which China's media blackouts fueled public anger.

The "real reason" for the criticism of Conoco, said an unsigned editorial Thursday in The Wall Street Journal, "is to deflect this anger by showing that environmental concerns are being taken seriously."

"Conoco is a convenient whipping boy, since foreigners have limited political influence, unlike state companies whose bosses hold high rank in the Communist Party."

Yet the Chinese government's handling of the Bohai spill could be indicative of increasing environmental concerns and tighter regulation.

"The laws and regulations for environmental protection are constantly getting stronger, so you can't compare a spill that happens today to something that happened a year ago," Lin Boqiang, professor of energy economics at Xiamen University told the Financial Times.

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China will not 'politicise' ConocoPhillips oil spill
Beijing (AFP) Sept 8, 2011 - China pledged Thursday not to "politicise" a vast spill at an oil field operated by ConocoPhillips despite strong criticism of the US petrol giant in state-controlled media.

The government has ordered an investigation into the spill in the northern Bohai Bay which environmental groups say has badly polluted the waterway and affected fishermen's harvest of seafood such as scallops.

"The oil spill is an incident in our bilateral trade cooperation," foreign ministry spokesman Liu Weimin told reporters.

"Relevant authorities will address this case in accordance with normal procedures and not politicise an isolated individual case."

ConocoPhillips has taken a beating in Chinese state media, which has accused the company of displaying "indifference" and issuing misleading statements about the spill that first came to light in June.

In a Wednesday meeting chaired by Premier Wen Jiabao, the state cabinet ordered a thorough investigation and vowed to punish those responsible.

The government acknowledged that Bohai Bay was already suffering from "heavy pollution" and said it would work to limit further industrial and reclamation projects in the area.

Bohai Bay has developed into one of China's fast-growing industrial regions and has long been cited as one of the nation's most polluted maritime areas.

The spill at China's biggest oil field had polluted an estimated 5,500 square kilometres (2,200 square miles) of water as of Monday, the official Xinhua news agency said.

ConocoPhillips said it halted production on Sunday at the Penglai 19-3 facility.

The US oil giant, which has denied any cover-up, says the equivalent of 3,200 barrels have leaked into the sea. It has defended its record over the spill but accepted responsibility for the damage caused.

It co-owns the oilfield with the state-owned China National Offshore Oil Corp (CNOOC).

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