Wednesday, July 13, 2011

New Oil Trace Surfaced in Bohai

One week after ConocoPhillips announced the oil spill had been fixed, new traces of oil were seen from satellite images of Bohai Gulf.

Operating in China has been attractive to western companies primarily because of low labor cost and low environmental cost. Offshore oil rigs use minimal of workers, but had tremendous environmental implication. By ignoring the environment impact, western companies can operate at a tiny fraction of cost comparing to fields in other parts of the world.

One more factor that caused this disaster was the structure of Chinese government. The domestic partner China National Offshore Oil Corp is a ministry level state enterprise. In the government hierarchy, it is half level higher than the marine affairs authority State Oceanic Administration, which is a deputy-ministry level agency. The head of the SOA would not want to risk his political aspiration to challenge a higher ranked state organization.

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