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September 1, 2011

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Oil firm says leaks are fixed

China's maritime authority is to "strictly verify" a report submitted by ConocoPhillips yesterday showing that the oil producer has met a requirement to seal the sources of two oil spills that began in June.

The spills, involving 3,200 barrels of oil and drilling fluids, occurred at two platforms in the Penglai 19-3 oilfield, China's largest offshore oilfield, and spread to up to 5,500 square kilometers in the Bohai Bay, a main fisheries region.

China's oceanic administration and environmental groups had accused Houston-based ConocoPhillips of being slow to react to continuing small seeps within the Penglai field. ConocoPhillips has been held accountable for the spills because it is the operator of the field with a 49 percent interest in the project. The remaining 51 percent is held by China's CNOOC Ltd.

The State Oceanic Administration imposed an August 31 deadline for completing the cleanup and ending risks of new seeps.

ConocoPhillips' China subsidiary said it submitted a report to the SOA yesterday showing it had met the requirements ahead of the deadline. The report explained the methods used to seal the spill sources and included third-party confirmation.

It also included the results of the company's internal investigation as to the cause of the incidents.

Of 16 small seeps found in the Penglai 19-3 oil field, only two were still visible and known to be sometimes active, The Associated Press quoted ConocoPhillips China as saying. The seeps are of residual oil and drilling mud that has been shifting to the seabed from beneath a layer of sand, according to AP.

"While we are still cleaning up residual material on the seabed ... we believe we have achieved the 'two completes' by the deadline," the company said in a statement.

The SOA, which called the spills "the most serious marine ecological incident in China," said it would immediately review the report and arrange experts to carry out on-site inspections.

ConocoPhillips estimates the amount of fluid spilled from the two incidents at about 3,200 barrels, including 700 barrels of oil and 2,500 barrels of mineral oil-based drilling mud. Such mud is used as a drilling lubricant.

The Penglai project is the largest offshore oilfield yet discovered in China, with net crude oil production averaging about 56,000 barrels per day, ConocoPhillips said.

The SOA has set up a working group to assist those who may have been affected, including scallop growers in Hebei Province, to seek compensation. The administration said last week it was hiring lawyers to sue ConocoPhillips for ecological damage caused by the leaks and said then that the US company could face "tough measures" if it failed to seal off the leaks before the deadline.

The company said it is working on long-term solutions to prevent recurrences of the spills, which it has said were possibly triggered by pressure from drilling injections that leaked through natural faults in the seabed.

"As an extra precaution, the company will continue to search for and clean up any residual mineral oil-based mud that we may encounter," it said.

ConocoPhillips said that although there was no evidence that oil had soiled beaches, crews continued to monitor the shoreline daily.

The company said only five out of 56 samples of oil particles it collected along several thousand kilometers of shoreline appeared related to the spills of the two platforms. The vast majority of the samples appeared to be similar to fuel oil, it said.




 

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