China's State Oceanic Administration said Houston-based ConocoPhillips was late in reporting the oil leak -- first detected on June 4 at the Penglai 19-3 oil field in Bohai Bay.
Penglai, jointly owned by ConocoPhillips with a 49 percent stake and China National Offshore Oil Corp. with a 51 percent stake, is one of China's largest offshore oil fields. Last year daily net crude oil production averaged approximately 56,000 barrels of oil per day.
Houston-based ConocoPhillips "didn't take measures urgently to address major risks, resulting in marine pollution and environmental damage to a marine area of 6,200 square kilometers (2,400 square miles)," China's State Oceanic Administration said in a statement on its Web site.
Analyses by environmental researchers at Hawaii University and Chinese Research Academy of Environmental Science indicate that more than 7,000 tons of oil had spilled into Bohai Bay as of late October, China Daily reports.
"Conoco was deficient in management of the field and didn't adopt the necessary measures after the spill, all of which caused a larger oil spill because of its negligence," SOA said.
The newspaper reports that company spokesman John McLemore, in an e-mailed response to SOA's statement, said, "ConocoPhillips sincerely regrets these unfortunate incidents. We have fully cooperated throughout the extensive and thorough investigation, and have learned very important lessons."
McLemore said ConocoPhillips is putting into practice additional, customized enhancements to improve the safety of its operations. "We believe these lessons will help us in China and around the world," he added.
Environmentalists said SOA's decision will help the legal case to move forward.
"The investigation shows ConocoPhillips' illegal operation directly caused the incident and it should pay for the damages, environmentally and economically," Wang Yamin, an associate professor at Shandong University's Marine College told China Daily.
"We can be sure ConocoPhillips not only hid the incident from the public, but also lied about the reason," said Ma Jun, director of China's Institute of Public and Environmental Affairs.
SOA said that ConocoPhillips was supposed to apply an oil production system known as separate zone water flooding technology. Its failure to do so, SOA said, increased the sea bed's instability near platform B and caused a spill on the sea bed.
In early September, SOA ordered a halt in operations in Penglai 19-3.
Fishermen affected by the spill have demanded a compensation fund of at least $472 million, saying that large amounts of shrimp, fish, shellfish and sea cucumber have died.