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Compensation and prevention for damage resulting from offshore drilling in China

Based on a law and economics approach, observations are made on the efficiency of the legal regime to evaluate if the existing rules are in line with economic starting points. Following the limitations of the Chinese legal system as specified, the study ends with policy recommendations based upon a functional comparative study with several selected countries.

In the past four decades that China has devoted to its offshore oil exploration and production, a model of joint development between the China National Offshore Oil Corporation (CNOOC) and foreign operators has been used. Drilling for oil offshore is a challenging task with multiple hazards, as oil spills may originate both from daily operations and from offshore accidents. Therefore, it is considered as threats to life and property and endangers the marine ecosystem.

This book examines the legal remedies for compensating and preventing offshore oil damage in China, which generally include, inter alia, tort liability, claims process, insurance, and regulation. Some unique features rooted in the Chinese offshore oil industry fundamentally shape the liability distribution and the approaches to implement the rules, creating new challenges to damage compensation and ecological remediation.

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