Back to top

Analyst Blog

US oil major ConocoPhillips (COP - Analyst Report) has received the consent from the State Oceanic Administration (SOA) to start oil production at the Penglai 19-3 oilfield, off China's Northeastern coast.

ConocoPhillips’ development plan and its environmental impact assessment have been approved by the SOA and the company can gradually commence operations. However, the regulator will keep a check on the resumption activities in the area.

In January, the company received a go-ahead signal from the Chinese government's top economic planning agency – National Energy Administration (NEA) – for the revised development plan for the oil field in Block 11/05.

Situated 375 kilometers from Beijing, Penglai 19-3 is China’s largest offshore oilfield. Penglai 19-3 is operated by a Chinese affiliate of the U.S. oil major ConocoPhillips with a 49% stake. The field was jointly developed by CNOOC Ltd. (CEO - Analyst Report), which holds the remaining 51% interest.

The statement issued by the SOA compels ConocoPhillips to rigorously execute the requirements of the environmental assessment. CNOOC is also required to help its partner in meeting the requirements.

In 2011, a subsidiary of the U.S. oil major ConocoPhillips had experienced 2 oil spills in Penglai 19-3 that leaked about 3,200 barrels of oil. The leakage polluted the water and caused environmental damage. As per the mandate of the SOA, both ConocoPhillips and CNOOC were asked to stop production at the field since the agency found the clean-up act to be slow. Both the companies have agreed to pay $160 million to recompense for the incident.

Both, ConocoPhillips and CNOOC, hold a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, other stocks in the oil and gas sector like Cabot Oil & Gas Corporation (COG - Analyst Report) and Memorial Production Partners L.P. (MEMP - Snapshot Report), hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%