China okays revised development plan for Penglai 19-3 oil field

China's National Energy Administration has approved a revised development plan for second-phase development of Penglai 19-3 and Penglai 25-6 oil fields in northern Bohai Bay.

NEA approved the revised development plan in December. A development plan initially was approved in 2005 but ConocoPhillips China Inc. submitted a revised plan last year after the State Oceanic Administration halted production at Penglai 19-3 following a 2011 release of oil and drilling mud.

ConocoPhillips operates Penglai 19-3, which has yet to be fully restarted pending other government approvals. CNOOC Ltd. owns 51% interest in Penglai 19-3.

On June 4, 2011, seepage was observed on the seabed along a natural fault near Penglai 19-3 Platform B. Oil and gas bubbles were seen on the surface June 17 near Platform C, 2 miles from the Platform B seep (OGJ Online, Sept. 12, 2011).

The total volume released was estimated by ConocoPhillips at 700 bbl of oil and 2,589 bbl of mineral oil-based drilling mud.

ConocoPhillips and CNOOC in 2012 reached agreements with China’s Ministry of Agriculture and the State Oceanic Administration. The oil companies agreed to pay $160 million to the Ministry of Agriculture and $173 million to SOA in compensation for two June 2011 oil spill incidents in Penglai 19-3 (OGJ Online, Jan. 25, 2012).

Production from the first phase development of the Penglai 19-3 began in December 2002. On Jan. 17, 2005, the Chinese government officials approved the Phase 2 overall development plan for Penglai 19-3 and Penglai 25-6.

Second phase development is scheduled to include five wellhead platforms, central processing facilities and a new floating, production, storage, and offloading vessel. Penglai 19-3 is on Block 11/05, which already hosts an FPSO that was officially named Hai Yang Shi You 117 during 2007.

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