Bohai Sea

China-based offshore oil and gas producer China National Offshore Oil Corporation (CNOOC) has received preliminary approval from the National Development and Reform Commission (NDRC) to resume its Penglai offshore oil field, which was closed in 2011 after an oil spill.

NDRC gave its consent to the development plan for Penglai 19-3, Cnooc’s largest oil field offshore of China, in December 2012, reported Bloomberg.

In September 2011, the company was ordered by the State Oceanic Administration to close the field following a leakage of about 3,200 barrels of oil and fluids into North China’s Bohai Bay during drilling operations.

The accident forced the company and its project partner ConocoPhillips (COP) to clean up the spill and pay about $160m in damages to Chinese fishermen for losses.

In August 2012, Cnooc CEO Li Fanrong announced that approval from the agency was required to restart production.

According to a Cnooc spokeswoman, the company still needs to receive other regulatory approvals and meet other requirements before production can begin at the site.

"The loss in production was equivalent to about seven percent of the company’s targeted daily oil and gas production."

Penglai 19-3 produced 62,000 barrels of oil prior to its closure, and is expected to produce at its full capacity again within six months of the restart.

Bloomberg estimated that the loss in production was equivalent to about seven percent of the company’s targeted daily oil and gas production.

On 25 October 2012, Cnooc said that due to higher overseas output and stable production from domestic wells, excluding Penglai 19-3, its total net production rose by nine percent to 87.8 million barrels of oil equivalent in the third quarter of 2012.


Image: Penglai 19-3 produced 62,000 barrels of oil prior to the oil spill that forced its closure. Photo courtesy of Kmusser.