By Tom Hancock
Two oil spills which were kept secret from the public have highlighted the lack of transparent accident reporting in China’s offshore oil sector.
The latest incident occurred last month in the Bohai sea, near Shandong province in Eastern China. According to a summary [Chinese] of a press conference held today by China’s state oceanic administration, two leaks occurred at the Penglai field in the Bohai sea. The first was on June 4, when one platform leaked a small amount of oil, followed by a larger leak at another platform which was discovered on June 17. The leaked oil affected a 158 square kilometer area of sea. The causes of the leak are still unclear, according to the summary. The oil field, China’s second largest, was discovered in a joint exploration project between China National Offshore Petroleum (CNOOC) and US company Phillips Petroleum in the late 1990s. Phillips Petroleum has a contract with CNOOC which gives them a controlling stake in the field.
The accidents were not made public by the oceanic administration, or the companies involved, until several weeks after they occurred. The first report [Chinese] on the leaks appeared on microblogging service Sina Weibo (China’s equivalent of Twitter) on June 21, where a post stated that two oil fields in the Bohai sea had leaked oil, and that the original leak occurred two days before the date of posting. On June 30, the Chinese newspaper Southern Weekend, known for its investigative reporting, published a story on the incident which dated the spill to June 10. According to state-run media, which started running stories on the leak this weekend, the CNOOC waited until July 1 to confirm details of the accident to investors.
According to journalist from Chinese business magazine Caixin who attended today’s press conference, the State Oceanic Administration stated that responsibility for the leak lay entirely with Phillips Petroleum. The size of the oil slick created by the leak is much larger than originally reported, according to the journalist. “It’s much more serious than we originally thought,” he said.
This is at least the second time in the last year that CNOOC has failed to publicize an oil spill in one of its oil fields. Caixin reported today that another leak occurred in the same oil field in April last year, creating an oil slick of between 10 and 100 square kilometers. The spill was reported to China’s Oceanic Administration, but was not made public by the department, and was not reported by the mainstream media. According to Caixin’s report, the only coverage of the incident was published in an industry journal called “Ocean Development and Management” in August last year, which also published photos of the clean-up operation.
Risks of oil spills along China’s coast are increasing as China exploits more of its native oil reserves. China’s native crude oil output grew by almost 7% last year, according to China’s National Statistical Bureau. Last year, China’s largest ever oil spill occurred in Dalian, when 1,500 tonnes of oil spilled from a storage depot, creating an oil slick covering more than 900 square kilometers. Local fishermen received little or no compensation from Petrochina, the company responsible for the spill. Chinese laws regarding compensation following oil spills need to be improved, according to a report in the China Daily newspaper last month.