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China's CNOOC cuts production target after spill
by Staff Writers
Shanghai (AFP) Aug 24, 2011

Chinese oil giant CNOOC said Wednesday it has cut its 2011 oil production target by as much as 6.8 percent after an oil spill off China's northeastern coast.

CNOOC chairman Wang Yilin said he was "deeply sorry" for the leakage near platforms in Bohai Bay jointly owned by the state-controlled company and US titan ConocoPhillips, vowing to "further improve our management system".

The company lowered its production target to 331-341 million barrels of oil equivalent (boe) from 355-365 million boe as it announced first-half net profit soaring 51.4 percent year-on-year to 39.34 billion yuan ($6.2 billion).

"The Bohai Bay oil spill incident has rung the alarm to us: the safety and environmental risk is present at every moment," Wang said in a statement to the Hong Kong Stock Exchange.

"We will further improve our management system and increase the awareness of safety and environmental protection among our staff, in order to avoid the recurrence of similar incidents in the future."

About 3,200 barrels of oil and oil-based mud -- a substance used as a lubricant in drilling -- have leaked in Bohai Bay, the official Xinhua news agency said, citing ConocoPhillips China president Georg Storaker.

Storaker said 95 percent of the oil-based mud had been cleaned up and the rest of the work would be completed by the end of the month.

The State Oceanic Administration (SOA) -- which supervises and manages China's seas -- has said it plans to sue ConocoPhillips over the spill, which was first detected in early June.

SOA has not said whether it will take action against CNOOC.

A Chinese lawyer is also suing CNOOC and ConocoPhillips over the leaks, state media said previously.

Wang said the better-than-expected net profit for the January-June period was driven by "higher international oil prices and outstanding cost control measures".

Analysts had expected CNOOC to report a net profit of 36.4 billion yuan, according to a Dow Jones Newswire survey.

But Wang warned crude prices were becoming "increasingly volatile" due to turmoil in the US and European economies and conflict in the Middle East and North Africa.

CNOOC said its revenue jumped 51 percent to 124.57 billion yuan as the average selling price of its crude oil rose nearly 41 percent to $108.16 a barrel in the first half.

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US Gulf spill fund pays out $5 bn in first year
Washington (AFP) Aug 24, 2011 - Victims of BP's disastrous oil spill in the Gulf of Mexico have received more than $5 billion in compensation since a fund was set up a year ago, officials said.

The money has gone to 204,434 individuals and businesses, mainly in the five-state Gulf region: Alabama, Florida, Louisiana, Mississippi and Texas, the Gulf Coast Claims Facility (GCCF) said Tuesday.

The compensation fund was created four months after the April 2010 explosion on BP's Deepwater Horizon rig in the Gulf caused the biggest maritime oil spill in history.

Set up by the Obama administration and financed by BP, the independent $20 billion fund operates on behalf of BP to meet its US legal obligations to compensate victims.

The GCCF processed about one million claims in its first year of operation, the fund said in a report.

It noted conflicting views with BP over who should be compensated for damages.

"BP has often assumed public positions concerning claimant eligibility criteria and damage calculation methodologies directly at odds with the findings and determinations of the GCCF," the fund said.

In early July, BP appeared to be looking to limit the payouts, filing a document with the GCCF stating that "the current economic data do not suggest that individual and business claimants face a material risk of future loss caused by the Deepwater Horizon oil spill."

The British oil giant is responsible for covering the costs of the cleanup, restoring the damage, paying huge environmental fines, and compensating people whose livelihoods were affected by the disaster.

Hundreds of miles of fragile coastal wetlands and beaches were contaminated and a third of the Gulf's rich US waters were closed to fishing after the April 20, 2010, explosion that killed 11 workers and sank the Deepwater Horizon.

By the time the well was capped 87 days later, 4.9 million barrels (206 million gallons) of oil had gushed out into the Gulf from the well, some 50 miles (80 kilometers) off the coast of Louisiana.

BP estimated in its second-quarter earnings report that the spill would ultimately cost $41.3 billion and warned of "significant uncertainty" surrounding the company's ultimate exposure.

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China defends boat patrol in disputed waters
Beijing (AFP) Aug 25, 2011
China defended the actions of two patrol boats near disputed Japanese-administered islands in the East China Sea, state media reported late Wednesday, saying the vessels were protecting Chinese fisherman. Earlier Japan's coastguard said two Chinese fisheries patrol boats had intruded into a 12-nautical-mile zone around the islands that Japan considers its territorial waters. It prompted ... read more

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