ConocoPhillips and CNOOC Reach Agreement with China over Bohai Bay Oil Spill

ConocoPhillips announced Monday that, through its affiliate ConocoPhillips China Inc. (COPC) and the China National Offshore Oil Corp. (CNOOC), it has reached an agreement with the Chinese State Oceanic Administration (SOA) to resolve all governmental claims related to the June 2011 oil spill in Bohai Bay at the Peng Lai 19-3 Field, located off northeastern China.

Under the agreement, ConocoPhillips will pay $173 million to the SOA over the next two years and will also contribute $18 million by December 2014 toward social projects benefiting Bohai Bay. The agreement also provides that CNOOC will contribute $76 million toward such projects. The initial programs will focus on improving marine environment protection and reducing pollutants in the bay.

In June, two separate incidents led to more than 3,000 barrels of oil and mud to be leaked near platforms at the Peng Lai 19-3 Field, which is operated by ConocoPhillips and 51% owned by CNOOC, and led the Chinese Government to order a complete stop in production at the field in early September.

ConocoPhillips says it continues to work closely with CNOOC to meet the requirements of relevant government agencies to permit the field to return to normal operations.