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China's backlash grows against ConocoPhillips

Though the leaks may be largely under control, ConocoPhillips is still trying to contain the public backlash in China over its handling of recent offshore spills in Bohai Bay.


The incidents, which have attracted only minor attention in the U.S., have made the Houston oil company the target of widespread and at times harsh criticism in China, despite what the company describes as a wide-ranging and continuing response effort.

An article earlier this month in People's Daily, a large state-run newspaper, accused ConocoPhillips of "delays, negligence, cover-ups and cheating" in addressing the offshore spills. It complained of a "sharp contrast between the company's sensitivity regarding its image and its inadvertence towards China's oceanic environment."

Last month, China's offshore regulator, the State Oceanic Administration, said ConocoPhillips hadn't "fulfilled its responsibility as a reasonable and prudent operator."

And many citizens continue to vent about the situation on Weibo, a Chinese social media site.

"If the leaking occurred in America, would Conoco inform the public one month later like they did in China?" one commenter asked late last week.

"Conoco has completely lost public trust. They should face criminal charges," another said.

Two spills in June at the Peng Lai 19-3 field released 700 barrels of oil and 2,500 barrels of oil-based drilling mud into Bohai Bay. ConocoPhillips owns 49 percent of the field and operates it through a Chinese subsidiary, while China's state-owned China National Offshore Oil Corp., or Cnooc, owns 51 percent of the field.

ConocoPhillips said it stopped the leaks by a late August deadline, but Chinese officials rejected that assertion and ordered the company to halt production at the field early this month.

Since then, ConocoPhillips has been working with authorities to address remaining concerns. The company says that has included surveying thousands of miles of shoreline for oil and doing more than 750 dives in the vicinity of the spills. It has also established two funds, one to pay for environmental cleanup costs and another to pay for economic damages resulting from the spill.

The funds were set up "in recognition of its obligations to the people and the government of China, and as part of its commitment to a long-term relationship with them," the company said.

ConocoPhillips has denied allegations that it sought to mislead government officials by falsely claiming to have stopped and cleaned up the spills.

But the Texas oil giant has had trouble winning the trust of some Chinese, who have drawn parallels between the Bohai Bay incident and BP's disastrous oil spill in the Gulf of Mexico - even though that spill unleashed an estimated 5 million barrels of oil.

William Arnold, professor of energy management at Rice University, said that in the wake of the Gulf spill, all countries are more sensitive to offshore accidents and how oil companies respond to them.

Damien Ma, an energy analyst who follows China with the Eurasia Group in Washington, said the criticism of ConocoPhillips also reflects the delight some Chinese take in seeing a Western giant stumble, after being told for so long that Western companies were superior to Chinese companies.

In addition, he sees it as more evidence that environmental and public health advocates are gaining strength in China.

ConocoPhillips made the Peng Lai 19-3 discovery in 1999 and began producing oil from it three years later. It represents about 3 percent of the company's total annual production.

Chronicle reporter Yang Wang contributed to this story.




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