China Ocean Watchdog Orders Operations Halt at Penglai 19-3 Oil Field

BEIJING (Dow Jones Newswires), Sep. 2, 2011

China's State Oceanic Administration said Friday it is ordering a halt to all drilling and oil and gas production at the Penglai 19-3 oil field at Bohai Bay, which is operated by ConocoPhillips China.

The directive comes amid mounting public criticism against the U.S. oil company that it has been slow to act and provide information about oil spills at the field beginning in early June.

ConocoPhillips submitted a report Wednesday to the SAO and said it believed it had satisfied all the requirements laid out by the SOA for cleaning up and investigating the spill.

A ConocoPhillips spokesman said the company couldn't immediately respond to the statement, which was posted on the SOA's website.

Conoco must submit a marine environmental impact report and won't be able to restart operations until it receives approval, the SOA said.

The U.S. company hasn't satisfied the requirements for cleaning up and investigating the oil spill, it said, adding that Conoco was slow to act on the plan to clean up and investigate the spills though it made some progress in later stages.

The field's platform C hasn't been fully cleaned up and there are still leaks in the surrounding area, while cleanup measures at platform B are insufficient, it said

While operations are halted, Conoco should be willing to be strictly supervised by its joint-venture partner China National Offshore Oil Corp., or Cnooc., to prevent any new oil spills or environmental hazards, it said.

Conoco said last week that while it has sealed off all leaks at the field, residual oil, which is expected to dissipate, continues to seep from two leaks at the rate of one or two liters a day.

ConocoPhillips is responsible for operating the oil field, which has the capacity to produce 160,000 barrels of crude oil a day, in its joint venture with Cnooc.

Copyright (c) 2011 Dow Jones & Company, Inc.


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