One of two oil wells done, other to finish in less than 10 days, firm says

Not all of the business activities of China National Petroleum Corp in Chad have been suspended after a crude oil spill incident that it is cleaning up while negotiating with the government, said a source in the State-owned oil company.

Earlier international reports said Chad has suspended all activities of CNPC's Chad subsidiary, China National Petroleum Corp International (Chad) Co Ltd, for violations of environmental standards when drilling for crude oil 200 kilometers south of the African country's capital.

The suspension happened on Tuesday while Greatwall Drilling Co, a subsidiary of CNPC, was conducting an operation. Crude oil sprayed into a mud slush pit, the source who requested anonymity told China Daily on Thursday.

He emphasized the pit has a sound seepage control facility.

Citing a manager surnamed Wang working for the Chad arm of the oil company, Xinhua reported late on Thursday that the firm has promised the Chad government it will clean up the two wells where the crude spill happened completely within 10 days. The company will closely monitor the earth and water around the site and provide updated information to the government.

Workers were immediately deployed to clean up the spill, Wang said, adding that the company did not intentionally leave the crude in the pit.

The suspension was confined to Greatwall Drilling Co's operating site. China National Petroleum Corp International (Chad)'s other facilities, including a refinery near the capital N'Djamena, were unaffected, the source said.

Wang said that one of the two wells had already been effectively cleaned up. The company is actively communicating with the Chad government, and waiting for the government's permission to resume operations.

In April 2011, China National Petroleum Corp's first production well in Chad came on stream. Just four months later, a new refinery became operational near N'Djamena. It is 60 percent owned by CNPC International and 40 percent owned by the Chadian Government.

Because of the refinery, for the very first time in Chad's history, the country became able to supply itself with home-produced gasoline and diesel.

But several problems have hit the arrangement. The Chad government shut down the 588-million-euro ($780 million) 20,000 barrels per day refinery for several weeks in January 2012 in a row over prices for the local market.

By the end of 2011, CNPC had 22 projects in seven African countries, including Sudan, South Sudan, Niger and Chad.

Experts said the incident was a reminder that Chinese companies have an increasingly intensive footprint in Africa and should be particularly alert to possible conflicts.

"It is critically important for Chinese companies, State-owned or private, to fully understand the laws and working codes in specific African countries," said Liu Lide, an adviser to the Chinese-African People's Friendship Association and a former Chinese ambassador to Mali.

"Many Chinese enterprises think African countries do not have a sound legal system but this is not true. They have strict standards regarding environmental protection and labor use," he added.

zhengyangpeng@chinadaily.com.cn

(China Daily USA 08/16/2013 page18)