CNOOC Receives Notice to Respond to Bohai Bay Oil Spill Lawsuit

BEIJING (Dow Jones Newswires), Jan. 10, 2012

China National Offshore Oil Corp. Ltd. or CNOOC, said Tuesday that it has received a notice to respond to prosecutors of a lawsuit filed in Chinese court on behalf of 29 fisherman seeking damages from oil spills at its Penglai 19-3 oil field in Bohai Bay in June.

The fishermen said the spills may have caused the death of marine life and are seeking CNY234.57 million ($37 million) plus additional court fees, CNOOC said in a statement posted on its website.

China's state-run media reported in early January that north China's Tianjin Maritime Court accepted a lawsuit filed on behalf of clam and sea-cucumber producers seeking $78 million. CNOOC owns 51% of the field in a joint venture with ConocoPhillips (COP), its sole operator.

The leaks at the oil platforms led to the closure of one of the country's largest offshore oil production bases and hurt Conoco's image.

In two incidents in June, 3,343 barrels of oil and mud used in drilling leaked through the Bohai Bay seafloor near platforms operated by Conoco, according to company data. Trace amounts of oil continued to seep into the sea in the following months, but were mostly captured, it said.

Conoco data show most of the contamination was drilling mud, which was fully recovered along with most of the oil.

In September, Chinese maritime authorities faulted Conoco's production strategy and ordered a halt in production at the fields, which some analysts said could last well into 2012.

Separately, CNOOC said last week that it intends to capitalize a marine-environmental fund with an initial CNY500 million, or about $79 million. The company didn't explain the reasons for the fund plan.

Copyright (c) 2012 Dow Jones & Company, Inc.


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