CNOOC faces lawsuit in US over spill disclosure
- By He Shan
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E-mail China.org.cn, October 24, 2012
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China's largest offshore oil company CNOOC faces a class action suit fied by its U.S. investors over spill disclosure. |
As the repercussions of the June 2011 Bohai Bay oil spill still linger, China's state-owned oil company CNOOC faces a new headache after it was sued by its U.S. investors over its misleading statements issued during the spill.
China's largest offshore oil company said in an announcement posted on its website Tuesday evening that it received notice of the class action suit filed by its U.S. investor Sam Sinay, individually and on behalf of all others similarly situated, in the U.S. District Court for the Southern District of New York.
The plaintiffs accused CNOOC of failing to disclose June 2011's Bohai Bay oil spill in a timely manner and also releasing false and misleading information about its performance and financials.
A CNOOC official refuted Sinay's allegations, saying the company complied with rules and terms concerning information disclosure during the spill.
"The accusations are groundless, and the company will try hard to defend itself and safeguard its rights and interests," the official said, declining to comment further on the details of the case.
After an initial oil spill occurred on June 4, 2011 at CNOOC's PL 19-3 oilfield in Bohai Bay, a second spill later took place at the PL 19-3 oilfield on June 17, 2011.
As early as last March, Faruqi & Faruqi, LLP, a U.S.-based securities law firm, made an announcement that the CEO and management of the New York-listed CNOOC had violated federal securities laws by failing to disclose the information concerning the oil spills, and called for investors to pursue legal action against the company.
In the upcoming investigatory phase of proceedings, the court will ask CNOOC to submit relevant evidence, in accordance with U.S. law, said Peng Bin, a Peking University law professor.
"Chances are that the company is not willing to cooperate in a lawsuit, because it may cost much time and energy," Peng said. "Generally, over 90 percent of such lawsuits will end up in settlement."
CNOOC said last year it lost between 40,000 and 50,000 barrels a day of output after the Chinese government halted production in September 2011 at the PL 19-3 field in Bohai Bay following unsatisfactory progress in cleaning up the oil spills.
CNOOC shares have thus far not been affected by the news. Shares closed yesterday at HK$16.32, up 0.49 percent. The company is expected to report earnings for the first nine months of 2012 today.
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