Conoco, China National to Pay $360 Million for Oil Spill

China National Offshore Oil Corp. and ConocoPhillips agreed to pay 2.28 billion yuan ($360 million) to resolve claims and pay for environmental programs in China’s Bohai Bay after spilling 3,000 barrels of oil and drilling mud in the area last year.

Under an agreement with the State Oceanic Administration, the two companies will pay 1.683 billion yuan for “possible impacts” on the bay’s marine environment, Houston-based ConocoPhillips said in an e-mailed statement today. Conoco, the operator of the well in the Penglai oilfield, will pay 1.09 billion yuan of that as well as 113 million yuan to “support environmental initiatives.”

China National Offshore, the nation’s largest offshore oil producer, will pay 480 million yuan for programs designed to protect the Bohai Bay, according to a statement from the State Oceanic Administration. State-owned China National Offshore, based in Beijing, owns 51 percent of the well, according to ConocoPhillips.

The Penglai field, located off the coast of northeast China, produced an average of 60,000 barrels a day in 2011, according to ConocoPhillips.

ConocoPhillips dropped 0.3 percent to $71.98 at the close in New York. Cnooc Ltd., the Hong Kong-listed subsidiary of China National Offshore, fell 0.1 percent to HK$16.28 at the close.

The companies previously agreed to pay $160 million to compensate Chinese fishermen for losses from oil leaks.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE