Beijing orders thorough probe into oil spills

China's central government has ordered a thorough investigation into an oil spill from offshore wells at the Bohai Bay operated by U.S. oil giant ConocoPhillips.

The State Council, or cabinet, also said it would restrict the construction of new petrochemical projects along the bay in a bid to protect the environment from the effects of too much industrial development.

"Parties responsible for the spill accident must be made to contain the spill, clean up the mess and substantially alleviate the damages caused by pollution," It said in a statement yesterday.

Authorities must "ascertain the cause of the incident, as well as its harm and losses," and safeguard the legal interests of those who have suffered losses, it said.

ConocoPhillips said Monday that it had complied with a government order to suspend all drilling, water injection and production at the affected Penglai 19-3 oil field, one of China's biggest.

Operations are currently stopped at 180 producing wells and 51 injecting wells, for a total of 231 wells, said a statement by Houston, Texas-based ConocoPhillips, which operates the field in a venture with state-owned China National Offshore Oil Corp (CNOOC).

CNOOC, which owns 51 percent of the venture, said the suspension of production in Penglai 19-3 would reduce output by 40,000 barrels a day, in addition to the 22,000 barrels a day lost with the shutdown of the two wells where the spills occurred.

The State Council’s statement, announced by China’s CCTV prime-time news program, warned of the severe situation in the Bohai Bay as the environmental damage is assessed.

"The cause of the accident must be identified, damage and losses must be defined, and those responsible must be punished according to the law," the statement said.

The State Council requested relevant ministries and departments to improve Bohai Bay's environment and limit the construction of petrochemical plants there. Stricter standards for industrial projects in the area should be set, it said.

ConocoPhillips said it will establish a fund to cover costs resulting from the spills and "benefit the general environment in the Bohai Bay". However, the company failed to say how much money will be put into the fund Wednesday.

China's State Oceanic Administration last week ordered ConocoPhillips to halt operations on the entire Penglai 19-3 oilfield after finding the company failed to fully seal leaks before an August 31 deadline.