More Spills, More Trouble For Conoco
U.S. oil giant ConocoPhillips (NYSE:COP), already in the grip of growing public condemnation and law suits for its earlier oil spills off China’s northern coast near Platform C of the 19-3 Oilfield in the Bohai Bay, has admitted to about seven new leaks to State Oceanic Administration (SOA).
The case of enormous oil spill in Penglai 19-3 oilfield is not yet over. The Chinese unit of ConocoPhillips confessed to the SOA that it had showed inefficiency by not detecting the possible leakage points ahead of the spill.
SOA is rigorously collecting facts and examining the field so as to measure the extent of marine loss and pollution caused due to contamination of the oceanic environment. Under SOA’s supervision, ConocoPhillips has collected 387 cubic meters of spilled oil accounting for about 96.87% of the total oil spill from the platform.
Since the leaks were first reported in June, it is estimated that a total of 5,500 square kilometers of the bay’s surface has been polluted, with 870 square kilometers adversely infected.
Allegations have been levelled against Conco for losses incurred in local tourism and aquatic industries; while oil spills have reached the beaches in Hebei and Liaoning province.
Situated 375 kilometers from Beijing, Penglai 19-3 is China’s largest offshore oilfield. ConocoPhillips is the operator of the field with a 49% interest while the state-owned CNOOC Ltd. (NYSE:CEO) owns the remaining 51% interest.
For the long term, we maintain a Neutral recommendation on ConocoPhillips and expect it to perform in line with the broader market indices. The company faces tough competition from Chevron Corporation (NYSE:CVX) and Marathon Oil Corporation (NYSE:MRO).