By Zhong Ang and Chen Yong(种昂,陈勇)                          

Nation, Page No.9                                                 

Issue No. 533, Aug 22, 2011

Translated by Li Meng

Original article: [Chinese]

The massive oil spill in Penglai 19-3 oilfield is far from over. ConocoPhillips’s Chinese unit admitted to the State Oceanic Administration that they could have done better detecting potential leakage points and confessed that new leaks were recently discovered near Platform B.

The oil spill off North China's Bohai Bay on June 4 is the biggest environmental disaster in the area's history. At least 5,500 square kilometers of sea area had been polluted by August 6th.

Why didn’t ConocoPhillips give an explanation until a month after the incident?

“It’s because no consensus has been reached on the exact cause of the oil spill,” said an inside source at the North China Sea Branch of the State Oceanic Administration, or SOA.

According to the ConocoPhillips, the spills at platforms B and C resulted, respectively, from natural causes and human error in drilling.

“This type of underwater oil spill hasn’t been seen before in China.[…] The gathering of monitoring data, assessment of contaminated area and the analysis of the cause all take some time,” said an official from China National Offshore Oil Corp, or CNOOC, which holds a 51 percent stake in the oilfield.

Although ConocoPhillips and CNOOC share responsibility for the accident, it seems unclear how much responsibility each of them should take. One deputy general manager said that the ConocoPhillips is responsible for oil field exploitation, operation and safety - as BP was in the Gulf of Mexico - while CNOOC acted more like a monitor and collaborator for China.

If the accident at Platform B was really due to natural causes, the compensation burden on both ConocoPhillips and CNOOC could be reduced dramatically. However the SOA has rejected ConocoPhillips’s explanation, and is still urging ConocoPhillips to identify the real cause.

At the moment, it seems that the two parties are in a standoff. ConocoPhillips hasn’t yet explained the cause of the accident, and although the SOA rejected their conclusion, the administration can’t conduct the investigation itself due to lack of qualified staff, technology and funds.

The SOA has given an ultimatum to CPOC – by Aug 31 the sources of the leak must be sealed and a thorough and complete inspection must be done to eliminate the potential risk of another oil spill. Failing this, the SOA has warned that it may order the suspension of all ConocoPhillips’s Chinese operations.

The SOA’s North China Sea Branch has invited bids for the legal services to handle the oil spill litigation. At the same time, it has also sent personnel to the area to investigate on the cause and collect evidence for the lawsuit against ConocoPhillips. The SOA has been all alone in the battle and is facing problems gathering evidence for the case.

The farmers who suffered economic losses from the accident have appealed to the government for compensation because they have almost no chance of winning claims independently.

The accident has highlighted several problems with China’s environmental supervision of oil extraction at sea.

1) The SOA’s lack of required technology and staff skilled in oil spill management.

2) The lack of legal support for fishermen seeking compensation.

3) The lack of unified management in environmental supervision system of Bohai Bay.

4) The inadequacy of penalties for guilty parties.

High pollution often accompanies intense exploitation of ocean resources. Seven similar oil spill cases occurred from 2007 to June 2011. The Bohai Bay accident serves as a warning – if we are not fully aware of the importance of environmental protection and don’t start improving environmental monitoring from the early stage of ocean exploitation, we might not be able to see blue ocean in the future.