ConocoPhillips, CNOOC reach settlement on Bohai Bay spill

Jan. 25, 2012

ConocoPhillips and CNOOC Ltd. reached an agreement with China’s Ministry of Agriculture in which the oil companies agreed to pay about $160 million in compensation for two oil spill incidents during June 2011 in Penglai 19-3 oil field in Bohai Bay.

Paula Dittrick

The agreement settles public and private claims of potentially affected fishermen in certain Bohai Bay communities, ConocoPhillips said in a Jan. 24 release.

The government in September halted drilling and production at the field, which remains shutin. On June 4, seepage was observed on the seabed along a natural fault near 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).

ConocoPhillips also said Jan. 24 that it designated $16 million of a previously established environmental fund to be used to improve fisher resources.

Previously, CNOOC approved a fluid discharge and depressurization plan from operator ConocoPhillips China Inc.

Since June 19, less than 1 bbl of oil has been released, ConocoPhillips said, adding that the estimated total volume released was 700 bbl of oil and 2,589 bbl of drilling mud. In November, China’s State Oceanic Administration said “Conoco was deficient in management of the field.”

About the Author

Paula Dittrick | Senior Staff Writer

Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.

Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.