Business, Economics and Jobs

China oil spill: CNOOC, ConocoPhillips agree to pay $266 million in compensation


This photo taken on July 26, 2011 shows Chinese holidaymakers swimming off the country's northern coast despite oil sludge washed ashore by the spill in Bohai Bay.



China National Offshore Oil Corp (CNOOC) and ConocoPhillips have agreed to pay $1.68 billion yuan ($266 million) in compensation for damage caused by a series of oil spills off the coast of northern China last year, the Financial Times reported today.

Houston-based ConocoPhillips, the operator of the well in the Penglai oilfield, will pay 1.09 billion yuan of that as well as 113 million yuan to “support environmental initiatives,” Bloomberg reported.

Leaks from the oilfield in China’s already heavily polluted Bohai Bay began in June and were eventually sealed in late October, according to Reuters.

The oil polluted an area measuring 2,394 square miles – more than twice the size of Luxembourg.

Bloomberg said the companies previously agreed to pay $160 million to compensate Chinese fishermen for losses caused by the leakage of 3,000 barrels of oil and drilling mud.

CNOOC, China’s largest offshore oil producer, will also pay 480 million yuan to “resume the social responsibility for Bohai environmental protection,” the company said in a statement.

The money will be used to fund environmental programs such as “ecological and environmental protection” and restoration of the “damaged marine ecological environment”.

Energy-hungry China is one of the world’s largest consumers of crude and is no stranger to major oil spills.

In 2010, an oil pipeline explosion in the northeastern city of Dalian sent oil across an area of 165 miles.