2 Missing after Oil Platform Accident in East China Sea

BEIJING (Dow Jones Newswires), Sep. 8, 2010

More than 30 workers trapped on an offshore oil platform badly listing in the East China Sea following a strong typhoon were rescued Wednesday morning, but two remain missing, authorities said.

No oil leaked into the Bohai Sea from the well in the Shengli oil field, and there will be little impact on production of the operator, China Petroleum & Chemical Corp., as offshore areas of the field produce only small amounts of crude, said a media official with Sinopec's state-owned parent China Petrochemical Corp., or Sinopec Group.

Typhoon Malou created sea waves as high as four meters last night which rocked the Sinopec oil platform, according to Sinopec Group.

It was the second major accident to occur in China's oil and gas sector within 24 hours, following an explosion Tuesday at the aromatics unit of PetroChina's Fushun Petrochemical, which also owns a 214,000 barrel-a-day refining complex in northeastern China's Liaoning province.

The Ministry of Transport said the missing workers fell from the oil platform around 11 p.m. Tuesday at Shengli, one of the biggest oil fields in China. The platform was located in very shallow water near the Yellow River off the coast of Shandong province.

The ministry said the No. 3 drilling platform, which is about five nautical miles offshore in water that is seven meters deep, started listing Tuesday, sending four workers into the water and trapping 32 onboard. Rescue helicopters sent early this morning retrieved 34 workers.

The platform is mostly used for repairing oil wells, the Sinopec Group official said.

China Petroleum & Chemical Corp., listed in Hong Kong and Shanghai, is China's second-largest listed oil producer and biggest oil refiner.

Oil Supply Challenges

The accidents at Shengli and at Fushun Petrochemical come on the heels of a major accident for PetroChina, a unit of state-owned China National Petroleum Corp., in July when an oil pipeline near the tourism and shipping hub of Dalian exploded, sending flames and oil into the water that took nine days to clean up in a huge effort.

The volume of that spill was far smaller than the months-long leak from BP PLC's (BP) Macondo well in the Gulf of Mexico, but the accidents underscore the challenges to supply the world's biggest energy consumer.

China surpassed the U.S. as the world's biggest energy user last year, according to the International Energy Agency. China relies primarily on coal for its power, and only less than half of the amount of the oil that the U.S. does.

But supplying commodities for China's rapid industrialization is straining the system. China has the deadliest coal mines in the world, though death rates are declining after repeated safety crackdowns. In June, wastewater from a copper-processing plant run by major mining company Zijin Mining Group Co. spilled into a river in southeastern Fujian province, killing fish and threatening drinking supplies.

Copyright (c) 2010 Dow Jones & Company, Inc.


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