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Conoco seals up two oilfield leaks

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15:44, August 25, 2011

BEIJING - ConocoPhillips China, the operator of the leaking oilfield off North China's Bohai Bay, said on Wednesday that the sources of the first two leaks have been permanently sealed.

The company, a local unit of Houston-based energy giant ConocoPhillips, also said that it will meet the target set by the State Oceanic Administration (SOA) to completely finish its cleanup by the end of August.

The massive spill in the Penglai 19-3 oilfield was first observed near Platform B and C as early as June, but nine residual leaks, around 2 liters daily, were discovered last week around Platform C and have not yet been fully cleaned up.

"We're making good progress as we have captured 95 percent of the identified volumes around Platform C," Georg Storaker, president of ConocoPhillips China, told a news conference.

He added that the company is focusing on depleting the oily mud in the vicinity of Platform C in a very shallow area.

The Penglai 19-3 oilfield, 375 kilometers from Beijing, is the nation's biggest offshore oilfield, in which State-owned China National Offshore Oil Corp (CNOOC) holds a 51 percent stake.

"We're closely communicating and cooperating with CNOOC, and meet multiple times daily to discuss progress," Storaker said earlier during an interview.

The company shrugged off questions on whether the accidents resulted from human error by saying that it is still investigating and will deliver the results to the maritime watchdog by the end of this month.

The SOA has criticized the company for handling the cleanup in an inefficient and passive manner, and said last week that it was planning to sue the company for the oil leak, which has polluted waters covering almost 4,250 square kilometers.

In addition, farmers from Hebei province, who claimed that the oil spill caused disastrous losses to their scallops and vegetables, are also seeking compensation from ConocoPhillips China.

More than 200 farmers from Laoting and Changli counties in the province have trusted Beijing Yingke Law Firm as their representative to sue ConocoPhillips for compensation.

Xun Shaobin, 58, from Nanhaibin village in Laoting county, who cultivates 4.2 hectares of sea cucumbers, said the damage caused by the oil spills was devastating.

"Starting from late June, the black color of the sea cucumber began to turn into a yellowish green, which was followed by massive deaths more than 60 percent of the sea cucumbers died," said Xun, who estimated he had lost about 1.2 million yuan ($187,000).

Wang Yamin, an associate professor from the Marine College under Shandong University at Weihai, said the total loss in aquaculture caused by the spills could add up to 1 billion yuan.

"The estimate is based on the historical figure of the aquaculture industry in Bohai Bay," he explained. "But we should remember that damage to fishing resources is only a small part of the losses caused by oil spills," Wang said.

ConocoPhillips China, however, argued that it has collected 56 samples across the coastal area along northwest Bohai Bay, but only two contained traces of the Penglai crude oil.

It refused to reveal the name of the third-party company that conducted the testing.

Jia Fangyi, a lawyer from Beijing-based Great Wall Law Firm, sued the company in maritime courts in Tianjin and Qingdao, and the High People's Court of Hainan province on Aug 9.

"All of the marine resources in China belong to the 1.3 billion Chinese citizens, therefore the pollution has infringed on our rights to property and health," he said at a news conference announcing his lawsuits. "Each Chinese person has the right and obligation to file a suit."

But all three courts refused to accept the case, he said on Monday.

According to Storaker, ConocoPhillips China "has not received any notification or claims on compensation issues so far", and has not discussed any compensation yet.

"This is something we'll deal with it according to Chinese laws if they have any claims coming to us," he said.

The SOA announced on late Wednesday that it has begun to prepare a lawsuit against ConocoPhillips China for compensation. A team of lawyers is being organized by its North China Sea branch, the administration said on its website.

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