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Wednesday, July 13, 2011

China Orders ConocoPhillips to Stop Penglai Operations

- China Orders ConocoPhillips to Stop Penglai Operations

Wednesday, July 13, 2011
Dow Jones Newswires
by Jing Yang

China's State Oceanic Administration said Wednesday that it has ordered ConocoPhillips to halt operations at platforms B and C at the Penglai 19-3 oil field in northeastern China's Bohai bay, due to slow progress in containing an oil spill at the field.

Oil is still leaking at the platforms, an oil slick still extends over the nearby area and there are signs that another oil spill could occur at Platform B, the administration said in a statement on its website.

"The measures that ConocoPhillips has taken so far are temporary and remedial...[and] risks of an oil spill recurring still exist" posing a significant threat to the Bohai marine ecosystem, it said.

Bohai bay has been the site of two spills in recent weeks, including a spill at Cnooc Ltd.'s offshore Suizhong 36-1 oil field.

The agency has asked the U.S.-based energy major to investigate thoroughly to ensure the source of the oil leak is plugged. "Operations aren't permitted to resume until oil spill risks are fully eliminated," it said.

ConocoPhillips said last week that the oil spill at Penglai 19-3--a joint venture with Cnooc Ltd.--had been contained and that output had fallen by 10%-15% due to the cleanup efforts. The company's China unit isn't immediately available to comment.

The Penglai field, discovered in 1999, produced an average 56,000 barrels a day in 2010, and is expected to reach 60,000 barrels a day this year, according to ConocoPhillips, which operates of the field.

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

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