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ConocoPhillips Sued By Fishermen For China Oil Spills

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CONOCOPHILLIPS OIL SPILLS
In this photo taken Sept. 3, 2011, a Chinese man holds up oil residue found in his shrimp farm in the coastal Leting county in the Bohai Bay near northern China's Hebei province. China's oceanic agency has ordered ConocoPhillips China to do more to prevent and clean up offshore spills that occurred June 4 and June 17, 2011 in the Bohai Bay that have raised an outcry among fishermen and environmentalists. (AP Photo) | AP

HOUSTON (AP) — A group of 30 Chinese fishermen sued ConocoPhillips in U.S. federal court on Monday, claiming their livelihoods have been greatly impacted by two oil spills last year from the company's offshore drilling operations in northeastern China.

Attorneys for the fishermen said the lawsuit was filed in U.S. District Court in Houston, where the company is based, because courts in China have blocked their efforts to file a similar suit. Tom Bilek, one of the fishermen's lawyers, noted that the company has already publically taken responsibility for the spills that released more than 30,000 gallons of oil into the Bohai Sea.

"The Chinese court system is not providing any kind of relief for these people. ConocoPhillips assumed responsibility and we are just trying to make them responsible," said Bilek, who is based in Houston.

Calls and emails to ConocoPhillips were not immediately returned Monday. In prior statements, CEO Jim Mulva has apologized for the oil spills' impact, and the company has set up compensation funds.

The two spills occurred in June 2011 in Penglai 19-3, China's largest oil field. Combined, the spills released more than 30,300 gallons of oil, or 723 barrels, and more than 110,000 gallons of mineral oil-based drilling mud, which is used as a lubricant for drilling. The oil and mud drained into the Bohai Sea and its bay.

The company said the first spill resulted from a natural fault in the oil reservoir. The second spill was due to a high-pressure zone that was encountered while drilling a well.

The company has said all sources of the oil spills — which covered about 2,400 square miles of water surface — have been sealed and a vast majority of the oil and the drilling mud has been recovered.

The spills were considered small, especially compared with the BP oil spill in the Gulf of Mexico in 2010, which released more than 200 million gallons of oil into the Gulf. But Conoco and its subsidiary, ConocoPhillips China Inc., still came under intense media criticism in China.

In November, Chinese authorities said an investigation found there were shortcomings in ConocoPhillips China's systems and management, and that the company failed to take necessary preventive measures after signs of a problem emerged.

ConocoPhillips and its partner, the China National Offshore Oil Corp., reached a $160 million agreement in January with China's Ministry of Agriculture to settle compensation claims related to the spill. In April, ConocoPhillips said it would pay $191 million to a Chinese agency to help pay for social projects in Bohai Bay and improve marine environment protection and reduce pollutants in the bay.

Bilek, the fishermen's attorney, alleged that his clients have been excluded from making compensation claims because of a complicated and bureaucratic system that has been set up to distribute the funds.

"ConocoPhillips said it is responsible but they have not provided procedures for any of these people to get paid. They are only paying the Chinese government and not the people that are injured," said Bilek, who also represented fishermen who sued BP after the Gulf oil spill.

The company has previously said it remained committed to resolving issues related to the spills.

"The BP and Conoco disasters are cautionary tales. Both demonstrate the risks of deep water drilling and the global arrogance of big oil," said Stuart Smith, a New Orleans-based attorney also representing the fishermen.

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