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China says not yet set damages for oil spill

by Reuters
Tuesday, 16 August 2011 11:48 GMT

* SOA branch to represent govt in suing responsible parties-Xinhua

* ConocoPhillips says has recovered over 2,100 barrels of oil (Adds SOA denial, ConocoPhillips comments)

BEIJING, Aug 16 (Reuters) - China's maritime authority said on Tuesday it had not determined the compensation it would seek for ecological damage caused by a spill at the Bohai Bay oilfield, while it plans to sue the parties responsible for those damages according to state media.

The State Oceanic Administration (SOA), on its website, denied a report by the Economic Information Daily, citing unidentified sources, that the government was considering demanding more than 100 million yuan (${esc.dollar}15.6 million) from CNOOC Ltd and ConocoPhillips , which own the oilfield.

"Related work on compensation for ecological damage from the Bohai oil spill is ongoing," the SOA said on its website (www.soa.gov.cn).

"Final compensation has not been fixed," it said, adding that the newspaper report was "untrue".

The North China Sea branch of the SOA will represent the government in suing responsible parties for ecological damages by the oil spill, Xinhua reported.

The oil leak at the Penglai 19-3 oilfield, China's biggest offshore oil field, which started in June, have polluted 840 square kilometres of water, the SOA has said.

ConocoPhillips China said on Friday that as many as 2,500 barrels of oil and mud had leaked from the oilfield in the Bohai Bay, off the coast of northern China.

The subsidiary of the Houston-based company, which operates the oilfield, said it could not comment on speculation about future actions the SOA may take but was making efforts to finish the clean-up by the end of this month.

"ConocoPhillips is making significant progress cleaning up the mineral-oil based mud on the sea floor, which we expect to have complete by the end of August," the company said in a email to Reuters.

By Tuesday, ConocoPhillips China had recovered 337 cubic meters (2,119 barrels) of oil-based mud from around the Penglai 19-3 C platform, the company said on its website (www.conocophillips.com.cn).

Small oil droplets were seen bubbling from the sea floor near Platform C on Sunday, and this area is being continuously monitored to determine the source of the droplets, it said.

Near the B Platform, the containment device that has been placed on the seabed over the current location of the seep is containing any hydrocarbons that are released from the seep, it added.

ConocoPhillips has a 49 percent stake in the oilfield and acts as the operator, while China's offshore oil specialist CNOOC Ltd has the remainder.

Last month, the SOA said ConocoPhillips could be fined up to 200,000 yuan (${esc.dollar}30,946) for the accident, according to law. But that figure did not include any compensation for ecological and economic damage.

The administration has accused ConocoPhillips of being too slow to clean up the spill and has demanded an apology. It has also asked the company to contain the oil spill, clean up polluted areas and conduct a thorough investigation before Aug. 31 to eliminate further risks of oil spills.

(${esc.dollar}1 = 6.390 Chinese Yuan)

(Reporting by Chris Buckley and Judy Hua; Editing by Ken Wills and Jane Baird)

Our Standards: The Thomson Reuters Trust Principles.


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