US firm's bill for oil spill off Shandong may soar

PUBLISHED : Thursday, 07 July, 2011, 12:00am
UPDATED : Thursday, 07 July, 2011, 12:00am


ConocoPhillips, the US oil and gas company involved in two recent oil spills off the coast of Shandong province, may end up facing a far higher compensation bill from the central government than the 200,000 yuan (HK$240,400) penalty announced on Tuesday, a marine environment expert says.

Professor Wang Yamin , from the Marine College at Shandong University in Weihai , said the final sum could be triple the immediate economic losses caused, including the impact on the fishing industry and some endangered animals.

Wang said related central government departments such as the State Oceanic Administration and Ministry of Agriculture could demand compensation from the polluter according to a state regulation enacted in 2008 that sets out the means of calculating economic losses to fisheries from pollution accidents.

'As the impact of such pollution usually lasts for three years, the amount of compensation is therefore triple the total economic loss,' he said. The total bill could be much higher than 200,000 yuan - the maximum penalty for sea pollution under mainland law.

The State Oceanic Administration said on Tuesday that compensation was a separate matter that could far exceed the fine for polluting the environment.

ConocoPhillips held a press conference in Beijing yesterday, saying it was still assessing the damage. Production had dropped at its Penglai 19-3 oilfield in Bohai Bay after the company relieved pressure on a well as part of the clean-up process, it said. Two oil leaks were detected separately on June 4 and 17.

In an interview with China Central Television yesterday, China National Offshore Oil Corporation, the joint owner of the oilfield, denied it had covered up the accidents.

Delays by the two companies in reporting the spills have triggered public anger, even though the State Oceanic Administration said no damage to the fishing industry had been found.