ConocoPhillips Faces Suit in China Over 2 Oil Spills

- ConocoPhillips Faces Suit in China Over 2 Oil Spills

Thursday, August 25, 2011
International Herald Tribune
by Edward Wong

The spills at the country's largest offshore oil field, developed by ConocoPhillips and China National Offshore Oil Corp., have released about 3,200 barrels of oil and drilling fluids into the sea.

The Chinese maritime authority is preparing to sue ConocoPhillips, the American oil company, over two oil spills that took place in June and engulfed large swaths of Bohai Bay in north China, according to a report by Xinhua, the state news agency.

The report, which appeared Wednesday, said the government agency, the State Oceanic Administration, was aiming to prepare a team of lawyers by the end of the month. It cited an agency spokesman as saying that 49 Chinese law firms had applied to provide legal assistance in the lawsuit, which would demand compensation.

The two spills at Penglai 19-3, the country's largest offshore oil field, covered at least 840 square kilometers in Bohai Bay and was the biggest oil disaster in China since a pipeline explosion in Dalian in July 2010 resulted in a leak into the Yellow Sea. About 3,200 barrels of oil and drilling fluids have spilled into Bohai Bay from the June accident. Penglai is being developed by ConocoPhillips and China National Offshore Oil Corp., commonly known as Cnooc.

John Roper, a spokesman for ConocoPhillips, which is based in Houston, said in an e-mail Thursday that the company had not received any notice of litigation.

"As far as compensation goes, we will listen to any requests and follow Chinese law, but we have not received any notification of claims," he said. "Cleanup efforts are going very well. We are more than 95 percent finished with the cleanup of mineral oil-based drilling mud and expect to reach our target of being 100 percent by the end of August."

Mr. Roper added that there was no more oil sheen on the surface of the water.

The Xinhua report said the oil spills had spread to beaches in the provinces of Hebei and Liaoning and were being blamed for a slowdown in local tourism and for economic damage to aquatic farming industries. The report also said "nine new oil spill sources" had been found in the bay as of last Saturday.

Mr. Roper said those nine seeps were not from new leaks but rather were residual oil and drilling mud from the June 17 spill that were now migrating to the surface. "Divers were only able to see them once the drilling mud was cleared away from the seafloor," he said. The seeps are small, are clustered together and are releasing a total volume of fluids of one to two liters per day "that is being immediately contained and cleaned up."

In Hong Kong on Wednesday, the chairman of Cnooc, Wang Yilin, addressed the compensation issue.

"If Cnooc is ruled to pay any form of compensation, we will certainly fulfill our commitment and do the right thing," Mr. Wang said at a news briefing after the company announced its first-half earnings, according to Bloomberg News. "Cnooc is a responsible company, and we honor our long-term commitment to the country, people and the environment."

Georg Storaker, president of ConocoPhillips China, said at a news conference in Beijing on Wednesday that the spill in Bohai Bay should not be compared with the disastrous spill in 2010 in the Gulf of Mexico for which BP was blamed.

(C) 2011 International Herald Tribune. via ProQuest Information and Learning Company; All Rights Reserved

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Injuries, Spills in UK Offshore Oil Fall - HSE

- Injuries, Spills in UK Offshore Oil Fall - HSE

Tuesday, July 19, 2011
Dow Jones Newswires
LONDON
by James Herron & Alexis Flynn

There were less potentially hazardous oil and gas leaks from offshore installations operating in the U.K. North Sea than in the corresponding period a year earlier, although the industry has yet to improve on the record low number of incidents recorded two years ago, data from the Health and Safety Executive showed Tuesday.

There were 73 major or significant hydrocarbon releases offshore in 2010-2011, down from 85 the previous year, the HSE said in its annual statistical report. Few of these releases could be considered as oil spills, it said. However, this was still significantly more than the record low of 61 incidents in 2008-2009. There were only seven incidents where a quantity of hydrocarbon liquid was released to the sea, with the amounts ranging from minimal to 500 kilograms, it said.

No workers were killed and there were 42 major injuries reported in the period, down 16% from 50 reports the prior year, the HSE said. The combined fatal and major injury rate fell to 151.84 per 100,000 workers in 2010-2011 compared with 187.9 in 2009-2010, the third lowest rate over the last 10 years, it said.

There were 432 dangerous occurrences reported in 2010-2011, down 2.5% from 443 in the preceding year, the HSE said.

The backlog of maintenance work on safety critical systems continue to decline, according to data gathered by the industry, the HSE said.

"This year's statistics are a step in the right direction," said Steve Walker, HSE's head of offshore safety. "But there is still much work to be done. Hydrocarbon releases are a key indicator of how well the offshore industry is managing its major accident risks, and the industry still hasn't matched or exceeded the record lows of two years ago," he added.

Walker said companies need to pick up the pace of improvement and that he expects all operators to be drawing up and implementing plans to meet that end.

Robert Paterson, industry body Oil & Gas U.K.'s health and safety director, said the statistics reflect the "significant effort made in the last 12 months to get back on track after last year's disappointing performance."

Paterson said the maintenance of safety critical systems remains of paramount importance for all members of Oil & Gas U.K. but acknowledged "there were still areas for us to improve upon."

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

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Big Oil Ready to Deploy New Containment Device for Deepwater Spills

Big Oil Ready to Deploy New Containment Device for Deepwater Spills

Monday, April 18, 2011
Dow Jones Newswires
by Angel Gonzalez

The high-tech marvel that's enabling oil companies to return to the deep waters of the Gulf of Mexico sits in a sun-baked industrial lot in the outskirts of Houston, not far from a gas station, a taco truck, and a highway that could quickly take it to the scene of the next Gulf oil spill.

The new spill-containment device was developed by a consortium led by ExxonMobil to control future spills similar to the largest marine oil spill that leaked more than 4 million barrels in the Gulf in April last year.

"We like it here," Marty Massey, chief executive of the Marine Well Containment Co. (MWCC), said Friday, as the company unveiled to reporters the device, called a capping stack that is the heart of the containment system. "[The device was] built here; the people who built it can maintain it" and can be deployed to its destination "in a matter of days," Massey said. "We are ready to go."

The 30-foot tall, 100-ton stack--a tree-shaped mass of blue, yellow and white steel with protruding knobs and gauges--is meant to be lowered on top of a deepwater gusher, either killing the flow or funneling the oil to ships. It draws on the lessons of the system that BP struggled to develop during the three months it fought to control the damaged Deepwater Horizon well that unleashed a major environmental disaster.

The company said the containment system that the device is part of can capture up to 60,000 barrels a day from wells up to 8,000 feet below sea level.

Massey said that the consortium, created by Exxon, Chevron, Shell and ConocoPhillips, is also developing a similar system with a higher capacity capable of capturing up to 100,000 barrels a day from gushers as deep as 10,000 feet. This improved version, Massey said, will operate from several bases along the Gulf Coast and will be ready around mid-2012.

As the government suspended deepwater drilling following the Gulf disaster, the oil industry needed to quickly take steps and prove that it was capable of controlling any future