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Conoco says reaches China spill compensation deal

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[January 25, 2012]  BEIJING (AP) -- ConocoPhillips said Wednesday that it and China National Offshore Oil Corp. reached a $160 million agreement to settle compensation claims from oil spills off northeastern China.

The Houston-based company said in a statement that the two had reached an agreement with China's Ministry of Agriculture over the oil spills last June in the Bohai Sea.

The spills were considered small, especially compared with the Gulf of Mexico spills in 2010, but Conoco, the operator of the Bohai field, still came under intense media criticism in China.

Conoco said the money, 1 billion yuan, would be used "to settle public and private claims of potentially affected fishermen in relevant Bohai Bay communities."

It said 10 percent of the money would go to the company's previously announced fund to improve fishery resources.

The agreement will likely stop a lawsuit that a group of more than 100 Chinese fishermen filed last year seeking compensation from ConocoPhillips China for damage to their sea cucumber catches.

In September, ConocoPhillips announced plans to set up two funds to pay compensation and address environmental problems resulting from the spills.

The government has already ordered the company to stop all production pending a full cleanup and a review to ensure no more oil seeps into the sea.

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The oil spill covered about 2,500 square miles (6,200 sq. kilometers) of water surface. It drew attention to pollution in the Bohai region due to industrialization, oil drilling and fast population growth that has decimated sea food and fish stocks and caused frequent red tides.

Sea cucumbers, one of many types of sea product harvested in the Bohai, are sausage-shaped, often spiky marine animals that are viewed as a delicacy by many in Asia.

[Associated Press]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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