) is close to resuming production at its largest offshore
oilfield, Penglai 19-3. The country's biggest offshore oil and
gas producer by capacity gets the Chinese government's top
economic planning agency's approval for the revised development
plan for the aforesaid oil field in Block 11/05, as per China's
National Energy Administration (NEA) report.
The National Development and Reform Commission of China has given
the company consent for the revised second phase of the overall
development plan for the oilfield in northern Bohai Bay following
the oil spill incident that forced the plant to shut down in Sep
Penglai 19-3 oilfield is operated by a Chinese affiliate of the
U.S. oil major
) with a 49% stake. The field was jointly developed by CNOOC,
which holds the remaining 51% interest.
In June 2011, a subsidiary of the U.S. oil major ConocoPhillips
had experienced an oil spill in the Penglai 19-3 oilfield that
caused environmental damage and polluted approximately 6,200
square kilometers of water. Both the companies have agreed to pay
$266.89 million (1.683 billion yuan) to recompense for the
Since Jul 13 ConocoPhillips was asked to stop production at
platform B and C of the Penglai 19-3 oilfield as per the mandate
of the State Oceanic Administration (SOA), which had considered
the clean-up act to be slow.
The second phase of the plan was already accepted by the Chinese
government way back in 2005. However, ConocoPhillips was still
required to submit a revised plan last Nov owing to the spill
incident. Armed with the latest approval of the revised plan,
CNOOC reached a step closure to resuming production at Penglai.
CNOOC still needs to go through other government agencies and
meet other requirements to restart production.
The resumption of operations in Penglai post-spill along with 16
development projects in offshore China is expected to boost
CNOOC's long-term growth profile. This will be complemented by
recent international acquisitions. The projects will likely be
supported by extensive exploration and development programs with
its partners over the next 3-5 years.
CNOOC currently retains a Zacks Rank #3 (short-term Hold
CNOOC LTD ADR (CEO): Free Stock Analysis
CONOCOPHILLIPS (COP): Free Stock Analysis
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