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.
Showing posts with label ConocoPhillips. Show all posts
Showing posts with label ConocoPhillips. Show all posts
Wednesday, July 13, 2011
Tuesday, July 05, 2011
Cost of Low Cost
Labor cost is not the only reason foreign manufactures rushed to China to set up plants. Although China's labor cost is up, foreign companies are not expected to leave.
ConocoPhillips was caught in a situation BP faced after the Mexico Gulf Oil Leak incident, after a micro-blog indicated an oil leak was on-going in the Bohai Gulf on June 20, 2011. The China's State Oceanic Administration responded half months later, with an official Xinhua news release, in which the oil leak was said to be within an area of '20 square meters (about the size of a typical family kitchen room, it is not a typo)', and had been cleaned up. All news agencies were instructed to use the official Xinhua news release, and prohibited from reporting on the incident.
Bohai Gulf is almost encircled by Liaodong Peninsula and Shandong Peninsula. Approximately 78k km2 and blocked by East China Sea and the Yellow Sea, it is almost an inland lake. According to personal blogs and twitters, oil accumulations could be see as far as hundreds of kilometers away from the alleged leaking place by tourists and fishermen.
The State Oceanic Administration declared the clean up had been completed in a news press held on July 4, 2011. Oil trace on water was reported to the agency as early as June 4th, but the origin was not located until sometime after June 17th. The agency stated the leak was 'almost under control' by June 21st. The agency also stated the maximum fine for such incident was CNY 200K ($30k). US based ConocoPhillips was found solely responsible for the oil leak.
ConocoPhillips was awareded Penglai 19-3 Oil Field, the largest off-shore oil field in China with 0.8 billion barrels of known reachable oil reserve. Oil prospecting in Bohai Gulf had been a low hanging fruit with success ratio over 50% in 6 continuous years, however, the area had been contracted to varies foreign companies for development.
ConocoPhillips was caught in a situation BP faced after the Mexico Gulf Oil Leak incident, after a micro-blog indicated an oil leak was on-going in the Bohai Gulf on June 20, 2011. The China's State Oceanic Administration responded half months later, with an official Xinhua news release, in which the oil leak was said to be within an area of '20 square meters (about the size of a typical family kitchen room, it is not a typo)', and had been cleaned up. All news agencies were instructed to use the official Xinhua news release, and prohibited from reporting on the incident.
Bohai Gulf is almost encircled by Liaodong Peninsula and Shandong Peninsula. Approximately 78k km2 and blocked by East China Sea and the Yellow Sea, it is almost an inland lake. According to personal blogs and twitters, oil accumulations could be see as far as hundreds of kilometers away from the alleged leaking place by tourists and fishermen.
The State Oceanic Administration declared the clean up had been completed in a news press held on July 4, 2011. Oil trace on water was reported to the agency as early as June 4th, but the origin was not located until sometime after June 17th. The agency stated the leak was 'almost under control' by June 21st. The agency also stated the maximum fine for such incident was CNY 200K ($30k). US based ConocoPhillips was found solely responsible for the oil leak.
ConocoPhillips was awareded Penglai 19-3 Oil Field, the largest off-shore oil field in China with 0.8 billion barrels of known reachable oil reserve. Oil prospecting in Bohai Gulf had been a low hanging fruit with success ratio over 50% in 6 continuous years, however, the area had been contracted to varies foreign companies for development.
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