China Clears ConocoPhillips to Resume Operations at Offshore Oilfield

BEIJING - ConocoPhillips was cleared to resume full operations at an offshore Chinese oilfield after being sanctioned by Beijing over 2011 oil spills.

China's State Oceanic Administration said on Saturday that the Penglai 19-3 oilfield in China's northern Bohai Bay could resume operations after making a number of unspecified changes. The move came after China's National Energy Administration approved in December a revised overall development plan for the field.

ConocoPhillips' China unit owns 49% of the field and operates it, while China's CNOOC Ltd. owns 51%.

The Penglai 19-3 field was ordered by China's State Oceanic Administration to halt production in September 2011 after it spilled 3,345 barrels of oil and oil-based drilling mud into the ocean. The leaks brought harsh criticism by Chinese media and authorities, largely directed at ConocoPhillips. The company has said it regrets the accidents.

Last year, ConocoPhillips and CNOOC agreed to pay $161 million to settle compensation claims resulting from the oil spills. ConocoPhillips, as operator of the field, would provide the money, while CNOOC would allocate part of an ecology fund it had set up to help restore and preserve fishing resources in the Bohai area.

ConocoPhillips' share of oil production from the Penglai 19-3 field was 62,000 barrels a day before the spills. The Houston-based company gradually resumed output last year, but its share of production was only 45,000 barrels a day at the end of the third quarter, it said.


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