ConocoPhillips To Establish Second Bohai Bay Fund

ConocoPhillips (NYSE:COP) today announced that its Board of Directors approved the creation of a second fund and will work with co-venturer, China National Offshore Oil Corporation (CNOOC) or other appropriate parties to specifically address environmental issues in Bohai Bay, China. The company also reaffirmed its previous September 6, 2011 announcement to establish a separate fund to provide fair and reasonable compensation for any damages arising from the incidents at the Peng Lai 19-3 field in Bohai Bay. The company takes these actions in recognition of its obligations to the people and the government of China, and as part of its commitment to a long term relationship with them. ConocoPhillips will work cooperatively with the appropriate governmental authorities in regard to these funds.

The incidents in Bohai Bay occurred on June 4 and June 17 and resulted in a total release of approximately 700 barrels (115 cubic meters) of oil into Bohai Bay and approximately 2,500 barrels (400 cubic meters) of mineral oil-based drilling mud (MOBM) on the seafloor. The Platform B fault has been sealed and the Platform C well permanently plugged and abandoned.

The released oil has either been collected, evaporated, biodegraded or broken down to background levels by virtue of waves and currents. The company continues to survey and sample the seafloor immediately around Platform C and clean up any residual amounts of MOBM that are encountered. This work will continue until ConocoPhillips, CNOOC and Chinese authorities are satisfied that the clean up is complete.

The company is currently in the process of implementing plans to depressurize the reservoir and take additional precautionary measures to prevent these incidents from recurring. ConocoPhillips is also preparing a new marine Environmental Impact Assessment and updating the Overall Development Plan as part of a phased recovery program. These plans are being carried out under the supervision of CNOOC and Chinese authorities.

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