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US oil giant halts production at China field after spill
by Staff Writers
Beijing (AFP) Sept 5, 2011

The US oil giant behind a huge spill off China said Monday it had halted production at the oilfield in line with a government order, as an influential official newspaper accused it of a cover-up.

ConocoPhillips, which denies trying to hush up the spill, said it had completed the shut-down late Sunday, two days after China's marine watchdog said it was not satisfied by efforts to stop the leak and ordered the stoppage.

The shutdown at Penglai 19-3, which is China's largest offshore oilfield, came as the People's Daily said ConocoPhillips had displayed "indifference" to the damage to the environment and issued misleading statements over the spill.

The newspaper, which is the mouthpiece of China's Communist Party, said the company had tried harder to protect its public image than to safeguard the environment in the months since the spill was made public in early June.

"There is a sharp contrast between the company's sensitivity regarding its image and its indifference to the pollution of the marine environment," said a column by People's Daily commentator Jiang Hongbing.

"After repeated delays and a series of cover-ups and deceptions, the production at the Penglai 19-3 oil field of ConocoPhillips has finally been ordered to stop."

ConocoPhillips co-owns the Penglai 19-3 field with the state-owned China National Offshore Oil Corporation (CNOOC), but is its sole operator.

On Monday the company, which says the equivalent of 3,200 barrels have leaked into the sea, defended its record over the spill and said it accepted responsibility for the damage caused.

"We reported the incident to the relevant authorities immediately and as fully as we could," spokesman John Roper told AFP by telephone.

"We're the operator and we accept full responsibility for what happened in the field."

Chinese environmental groups have criticised ConocoPhillips over the speed of the clean-up operation, while marine watchdog the State Oceanic Administration (SOA) has said it will sue the company over the damage.

Fishermen in Shandong, Hebei and Liaoning provinces that border Bohai Bay, east of Beijing, allege that oil from the leak has killed a large part of their harvest of seafood such as scallops.

The Penglai 19-3 oilfield began production in 1999 and was expected to produce around 60,000 barrels daily this year, according to ConocoPhillips.

CNOOC shares were down 8.9 percent on the Hong Kong exchange by Monday's close.

Dow Jones reported that Credit Suisse expected CNOOC's net production to drop by 8 million barrels in 2011, falling 2.3 percent from its full year production forecast, if Penglai remains shut for the rest of the year.

Operations of two platforms at the oilfield had already been halted since July 13 on government orders, resulting in a cut of 22,000 barrels a day, CNOOC said.

On Friday, the SOA said a report it received from ConocoPhillips China on August 31 showed the Houston-based company had failed to comply with its demand to complete the clean-up and halt all leaks by that date.

"ConocoPhillips did not seal the oil leaks thoroughly," the SOA said, adding that "new damage and oil leak risks could occur if the current way of exploration continued."

ConocoPhillips said on its China website that it would work with CNOOC on a plan to ensure the future safety of the field.

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Commentary: Global con?
Washington (UPI) Sep 1, 2011
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