CNOOC's reputation soiled by spill

Dec. 21, 2011 at 8:02 AM   |   0 comments

BEIJING, Dec. 21 (UPI) -- The latest oil spill off the southern coast of China could raise investment concerns over the China National Offshore Oil Corp., an analyst said.

CNOOC said one of its subsidiaries was notified by maritime authorities of a leak at its Zhuhai terminal in the South China Sea. There were no injuries or immediate environmental damage reported by the company, which said "the situation is under control."

The incident closed about 160 million cubic feet of natural gas per day. This translates to an operating loss for CNOOC of about $829,000 per day, The Wall Street Journal reports.

CNOOC was plagued by a series of accidents this year. It lost about 40,000 barrels of crude oil production per day in June from a spill at its Peng Lai field. ConocoPhillips, CNOOC's minority partner at a field in Bohai Bay, said it had about 13,000 cubic feet of oil-based drilling mud cleaned up from an October spill. Two earlier spills there were reported at around 3,000 barrels of oil.

Scott Darling, an analyst for Barclays Capital in Hong Kong, was quoted by the Journal as saying CNOOC's reputation was tarnished.

"The (latest) incident is likely to reinforce investor concern around CNOOC's operational delivery," he said.

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