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CNOOC denies sinking of oil ship

By Zheng Yi (Global Times)

13:36, January 20, 2012

China National Offshore Oil Corporation (CNOOC) has denied that an offshore oilfield vessel that capsized during construction on January 14 had sunk, saying on Wednesday that the ship was being salvaged and had not caused any pollution.

The ship, worth 740 million yuan ($117 million), and constructed by Wuchang Shipbuilding Industry Company (WSIC), which provides oilfield services to CNOOC, was reported to have sunk during a test voyage in the harbor of Nantong, Jiangsu Province, according to the Xinhua News Agency.

But Liu Zhengguo, a spokesman with the China Shipbuilding Industry Corporation (CSIC), the parent company of WSIC, denied the report.

"The ship tilted in shallow water near the dock after water poured in, but it did not sink," said Liu.

Liu further claimed that the accident did not result in any casualties or pollution.

"Unlike sinking, which might be caused by hitting rocks and seriously damage the hull structure, this accident may have been caused by faulty operation, and the hull structure of the ship can be repaired after it is salvaged," Wang Guoqiang, an industry insider, told the Global Times yesterday.

An anonymous staff member with CSIC told the Global Times yesterday that the reason for the accident was still under investigation.

According to CNOOC, it has purchased full insurance for the ship, and under the construction contract, the ship belonged to CSIC before delivery, the Beijing News reported.

CSIC confirmed that the ship was fully insured and it has begun settlement procedures, but claims the accident would not have a serious impact on its business performance, according to the report.

The accident led to a 1.8 percent fall in CSIC shares in Shanghai Wednesday afternoon, Xinhua reported.

According to WSIC, the cabin of the ship was flooded during maintenance between 1:30 pm and 2 pm on January 14, after a manhole lid was accidentally removed.

"The ship capsized after about 15 minutes," the company said in a statement.

The Shanghai salvage bureau has sent a 2,500-ton crane to hoist the ship back up, and the operation continued Wednesday afternoon, according to Xinhua.

The CNOOC has come under public scrutiny after a string of oil leaks occurred in 2011.

A gas leak was found in a sub-sea gas pipeline of its Zhuhai Hengqin gas processing terminal in the South China Sea in December, forcing the company to shut down some platforms. No injuries or pollution were reported.

Oil spills also occurred in the CNOOC's Penglai 19-3 oil field, a joint venture with ConocoPhillips China, in the summer and the Jinzhou 9-3 West oil field in October.

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