ConocoPhillips to pay $158 million damages for oil spill

Updated: 2012-01-26 10:24

By Cao Yin and Zhao Yinan (China Daily)

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BEIJING - Energy giant ConocoPhillips said on Tuesday that it would pay 1 billion yuan ($158 million) to settle compensation claims arising from the oil leaks from its Penglai 19-3 oilfield in Bohai Bay in June 2011.

ConocoPhillips, China National Offshore Oil Corp (CNOOC), the Ministry of Agriculture and the governments of Hebei and Liaoning, the two provinces most affected by the environmental disaster, have reached an agreement on the compensation claims, the ministry's website said.

ConocoPhillips and the CNOOC will also pay 100 million yuan and 250 million yuan to restore the marine, especially fishing, environment in the Bohai Bay and monitor the situation, the ministry said.

The Hebei and Liaoning provincial governments will distribute the compensation among affected fishermen.

Some lawyers and industry insiders, however, said dividing the money among affected fishermen is of crucial importance.

Zhao Jingwei, a lawyer from Yingke Law Firm that represents 107 fishermen from Hebei who filed a lawsuit against ConocoPhillips China in December, said he is worried that the fishermen might not get proper compensation.

"Since the agreement has been reached through private negotiations, the method to calculate the compensation and the distributing standard are not transparent," he said. "Besides, there is also a question mark over who will be entrusted to supervise the allocation."

Tian Jiguang, director of a non-governmental organization in Liaoning dedicated to protecting marine life, echoed Zhao's concern, saying he fears that the local government might not distribute the compensation amount properly among the affected fishermen.

"Since the economic loss can be evaluated in many ways, it could lead to different compensation methods," he said. "Also, the oil spill polluted the waters off the coasts of at least two provinces where fishermen's annual incomes are different. So proper coordination is needed to determine how much compensation they should be paid."

Most of the fishermen are "relatively isolated" from the outside world and, hence, don't realize that their catch has diminished because of the oil spill, Tian said. They don't even know that they can seek damages.

A fisherman, surnamed Ma, in Panjin city of Liaoning said his catch has diminished significantly this year and he is not sure whether the compensation could help improve his livelihood.

The State Oceanic Administration said in November that the oil spill from the ConocoPhillips China oilfield has polluted at least 6,200 square kilometers of the Bohai Sea, an area roughly nine times the size of Singapore. Sample tests conducted by the Ministry of Agriculture showed the concentration of oil in the coastal areas of Liaoning and Hebei provinces and Tianjin municipality to be the same, indicating a wide polluted area.