CNOOC

CNOOC- A Case Study on Environmental Regulation in China



CNOOC- A Case Study on Environment Regulation in China

Introduction

International economic integration has helped many developed and under developed countries to increase their activities and establish their businesses in the global market. At the same time, this rapid progression grounds some issues and problems of sustainable growth that disturb business stakeholders' welfare, specifically consumers. When asked to protect themselves against recent environmental issues of air pollution and clean water, many companies response with an impassive and poor attitude. Various countries have formulated environmental regulations to manage and integrate complex environmental, social and economic policy challenges of the global economy.

Despite these efforts, there are special economic zones comprise of regions, which are free-market-oriented e.g China, India, Pakistan etc. Companies working in these regions exempt from complying the country's regulations and state laws. China National Offshore Oil Corporation, also referred as CNOOC, lies in special economic zone in China. This paper discusses the company profile of CNOOC, its compliance status with environmental regulations and an analysis of environmental regulations compliance of other oil companies in terms of the some ethical theories.

Discussion

Accounting for about 40 present of world oil demand over the past half-decade, China has become a key driver for most oil and gas companies. According to the US Energy Information Administration (EIA), China's oil demand expects to influence 14.2 million barrels per day by the year 2025. China National Offshore Oil Corporation (CNOOC) is one of the prime producers of offshore crude oil and natural gas in China. CNOOC is a well-positioned organization, to capitalize on its dominant position and benefit from the increasing demand for oil and natural gas in China. It has headquarter in Hong Kong and operates in several countries including China, Australia, Myanmar, Canada etc.

Environmental Laws and Regulations

The Oil and Gas industry in which CNOOC functions are subject to several national, and local environmental rules and regulations regarding its oil and gas assessment, exploration and production procedures and other operations. In that competitive environment, CNOOC enjoys a lot of flexibility in compliance with these laws due to its existence in special economic zone.

CNOOC functions that come under the influence of environmental regulations are the generation, management, storage and disposal of solid waste materials. These Environmental regulations would become gradually strict and are likely to have a cumulative effect on companies its functions and operations.

Intense competition

The oil and natural gas industries are very competitive. CNOOC strives in China and international markets with major joined ventures with independent oil and gas companies all over the world. In this extreme competition era, CNOOC utilizes the advantages of SEZ and somewhere lags in complying with environmental protection regulations and international standards. The biggest proof can be taken from the latest incident of the set of oil spills occurred in Bohai Sea by the joint venture of CNOOC and U.S. ConocoPhillips, China subsidiary. The first and subsequent oil spill was occurred on June 4, 2011 and June 17, 2011 respectively, in the Bohai Sea (Cole, ...