ConocoPhillips says 99 pct of China spill cleared

[August 31, 2011]  SHANGHAI (AP) -- Under fire for oil spills off China's eastern coast, ConocoPhillips says it has finished collecting virtually all oil and drilling mud released into Bohai Bay, meeting a deadline to finish its cleanup by Tuesday.

China's State Oceanic Administration, however, criticized the oil company's handling of the spills that began in June and said it would work with those affected, reportedly including scallops growers in the area, to seek compensation for damage.

The administration had ordered ConocoPhillips China to complete the cleanup and fully contain the oil seeps by Aug. 31 or face unspecified harsher action.

Of 16 small seeps found in the Penglai 19-3 oil field, only two were still visible and known to be sometimes active, ConocoPhillips China said. The seeps are of residual oil and drilling mud that has been shifting to the seabed from beneath a layer of sand, it says.

"While we are still cleaning up residual material on the seabed ... we believe we have achieved the 'two completes' by the deadline," the company said in a statement.

The company, which operates wells in the field in a venture with state-owned China National Offshore Oil Corp., said about 2 liters (a half-gallon) of oil and drilling mud were being released each day, with minimal damage to the environment.

The company said it is working on long-term solutions to prevent recurrences of the spills, which it has said were possibly triggered by pressure from drilling injections that leaked through natural faults in the seabed.

"As an extra precaution, the company will continue to search for and cleanup any residual mineral oil based mud that we may encounter," it said. Such mud is used as a drilling lubricant.

The local outcry over the spills reflects growing pressures on the Bohai, a major fisheries base, from rapid industrialization, especially in the energy sector. On the gulf's northeastern end lies Dalian, where residents have marched to protest chemical factories, and fretted over oil spills and fires at refineries.

Local reports say 165 offshore rigs are operating in 20 Bohai oil fields.

China's oceanic administration and environmental groups have accused Houston-based ConocoPhillips of being slow to react to continuing small seeps within the Penglai field. It says oil spread up to 5,500 square kilometers (2,124 miles), with the worst damage in a 870 square kilometer (336 square mile) area.

Reports in the state-run media have likened the incident to last year's BP spill in the Gulf of Mexico, though the 3,200 barrels of oil and mud released in Bohai Bay is a small fraction of the 4.9 million barrels unleashed when the Deepwater Horizon drilling rig exploded, spewing out of control for months.

ConocoPhillips said it has permanently sealed the fault where the seeps have occurred and has placed containment devices over them to capture any leakage.

"There is no oil reaching the sea surface from the seep," it said.

The intense public scrutiny appears to reflect a renewed push by China's environmental authorities to crack down on a wide range of problems, including toxic metal contamination, failed sewage treatment systems and unsafe handling of dangerous waste.

Water quality along the country's heavily industrialized coastlines has sharply deteriorated in recent years.

ConocoPhillips said its own sampling of oil particles found along several thousand kilometers (hundreds of miles) of shorelines found that only five of 75 samples appeared related to the Bohai spill. Most appeared similar to fuel oil, it said.

Along the way, the survey crews collected 13,600 kilograms (nearly 30,000 pounds) of trash, the company said.

[Associated Press; By ELAINE KURTENBACH]

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