ConocoPhillips Reports Oil Leak In China's Bohai Bay

By Pierre Bertrand | June 04 2012 12:20 PM

Chinese oil company CNOOC Limited (Hong Kong: 0883) announced on Monday it received word that the local subsidiary of U.S. oil company ConocoPhillips (NYSE: COP) is cleaning up a small and contained oil spill, on the site where a much larger spill occurred last year.

Reuters

A labourer walks toward the Jidong Nanpu oilfield in Bohai Bay of north China's Hebei province. A Chinese court accepted a lawsuit that claims leaks from offshore oil-production platforms operated by ConocoPhillips on Friday, suggesting a change in how governments are dealing with energy companies.

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The spill was caused when a hose carrying oil decoupled from the ConocoPhillip's Penglai 19-3 oil facility. The company said 600 kilograms (about 1,200 pounds) of oil leaked into the Bohai Bay in North China, said CNOOC, which is co-developing the oil field with the U.S., company.

By Monday afternoon local time, there was no more oil left from the spill.

The Penglai 19-3 oil field was the site of a previous oil spill in 2011, in which 700 barrels of oil and 2,600 barrels of drilling mud seeped into the bay. In June 2011, two leaks were reported to Chinese officials. The first leak came from oil seeping through a fault line on the ocean floor. The other, noticed 13 days later, was detected from an existing well.

ConocoPhillips has since apologized and with the help of CNOOC established two relief funds to help pay for environmental damage following the first leak.

The 2011 spill is the subject of a lawsuit by Chinese farmers against the U.S. company.

[CNOOC] will keep close watch on the incident and will actively assist the [ConocoPhillips] with the related work, CNOOC said.