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ENERGY TECH
US oil giant stops work at China field after spill
by Staff Writers
Beijing (AFP) Sept 5, 2011

The US oil giant behind a huge spill off China said Monday it had halted production at the oilfield in line with a government order, as an influential Chinese newspaper accused it of a cover-up.

ConocoPhillips said it completed the shut-down late Sunday, two days after China's marine watchdog issued the order and said it was not satisfied by an operation to stop the leak and clean up the site.

"The stop of production was completed as of 8:00 pm yesterday," spokeswoman Donna Xue told AFP.

The shutdown at Penglai 19-3, which is China's largest offshore oilfield, came as the People's Daily said ConocoPhillips had displayed "indifference" to the damage to the environment and issued misleading statements over the spill.

The newspaper, which is the mouthpiece of China's Communist Party, said the company had tried harder to protect its public image than to safeguard the environment since the spill was made public in early June.

"There is a sharp contrast between the company's sensitivity regarding its image and its indifference to the pollution of the marine environment," said a column by People's Daily commentator Jiang Hongbing.

"After repeated delays and a series of cover-ups and deceptions, the production at the Penglai 19-3 oil field of ConocoPhilips has finally been ordered to stop."

ConocoPhillips co-owns the Penglai 19-3 field with the state-owned China National Offshore Oil Corporation (CNOOC), but is its sole operator.

On Monday the company, which says the equivalent of 3,200 barrels have leaked into the sea, defended its record over the spill and said it accepted responsibility for the damage caused.

"We reported the incident to the relevant authorities immediately and as fully as we could," spokesman John Roper told AFP by telephone.

"We're the operator and we accept full responsibility for what happened in the field."

Chinese environmental groups have criticised ConocoPhillips over the speed of the clean-up operation, while marine watchdog the State Oceanic Administration (SOA), has said it will sue the company over the damage.

Fishermen in the Shandong, Hebei and Liaoning provinces that border Bohai Bay, east of Beijing, allege that oil from the leaks has killed a large part of their harvest of such seafood as scallops.

The Penglai 19-3 oilfield began production in 1999 and was expected to produce around 60,000 barrels daily this year, according to ConocoPhillips.

By midday, shares in CNOOC had fallen by 7.6 percent on the Hong Kong exchange.

Credit Suisse said it expects CNOOC's net production will drop by 8 million barrels in 2011, falling 2.3 percent from its full year production forecast, if Penglai remains shut for the rest of the year, Dow Jones reported.

Operations of two platforms at the oilfield had already been halted since July 13 on government orders, resulting in a cut of 22,000 barrels a day, CNOOC said.

On Friday, the SOA said a report it received from ConocoPhillips China on August 31 showed the Houston-based company had failed to comply with its demand to complete the clean-up and halt all leaks by that date.

"ConocoPhillips did not seal the oil leaks thoroughly," the SOA said, adding that "new damage and oil leak risks could occur if the current way of exploration continued."

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Crude falls in Asia on US, China economic fears
Singapore (AFP) Sept 5, 2011 - Crude fell in Asian trade Monday as concerns over the US and Chinese economy put a damper on prices, analysts said.

New York's main contract, light sweet crude for delivery in October, dipped 91 cents to $85.54 per barrel.

Brent North Sea crude for October delivery shed 73 cents to $111.60.

Oil prices were hit by persistently high unemployment rates in the US as well as runaway inflation in China, said Victor Shum, senior principal of Purvin and Gertz energy consultancy in Singapore.

"Jobs data in the US for August indicates that job markets may be stalling, and some data from China also shows reduced economic growth," he told AFP.

The highly-awaited US non-farm payrolls report released Friday showed the economy of the world's largest oil consumer creating no jobs in August, leaving the unemployment rate at a stubbornly high 9.1 percent.

A day earlier, two separate surveys showed China's manufacturing activity rebounding slightly last month, but both indicated that inflationary pressures -- a major bugbear for policymakers -- had increased as well.

Beijing has been struggling to tame inflation, which hit a three-year high of 6.5 percent in July, amid fears rising food and housing costs could trigger social unrest in the country of more than 1.3 billion people.





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