US oil major
) has received the consent from the State Oceanic Administration
(SOA) to start oil production at the Penglai 19-3 oilfield, off
China's Northeastern coast.
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ConocoPhillips' development plan and its environmental impact
assessment have been approved by the SOA and the company can
gradually commence operations. However, the regulator will keep a
check on the resumption activities in the area.
In January, the company received a go-ahead signal from the
Chinese government's top economic planning agency - National
Energy Administration (NEA) - for the revised development plan
for the oil field in Block 11/05.
Situated 375 kilometers from Beijing, Penglai 19-3 is China's
largest offshore oilfield. Penglai 19-3 is operated by a Chinese
affiliate of the U.S. oil major ConocoPhillips with a 49% stake.
The field was jointly developed by
), which holds the remaining 51% interest.
The statement issued by the SOA compels ConocoPhillips to
rigorously execute the requirements of the environmental
assessment. CNOOC is also required to help its partner in meeting
In 2011, a subsidiary of the U.S. oil major ConocoPhillips had
experienced 2 oil spills in Penglai 19-3 that leaked about 3,200
barrels of oil. The leakage polluted the water and caused
environmental damage. As per the mandate of the SOA, both
ConocoPhillips and CNOOC were asked to stop production at the
field since the agency found the clean-up act to be slow. Both
the companies have agreed to pay $160 million to recompense for
Both, ConocoPhillips and CNOOC, hold a Zacks Rank #3, which is
equivalent to a short-term Hold rating. However, other stocks in
the oil and gas sector like
Cabot Oil & Gas Corporation
Memorial Production Partners L.P.
), hold a Zacks Rank #1 (Strong Buy) and are expected to perform