COSL complies fully with Marine Environment Protection Law of The People’s Republic of China, Regulations of The People’s Republic of China on the Administration of Environment Protection in the Exploration and Development of Offshore Petroleum, Regulations of The People’s Republic of China on the Prevention of Vessel-induced Sea Pollution, International Antifouling Convention MARPOL73/78 Convention and Blue Sea Action Plan approved by the State Council. These documents have provided good guidance to the Company on drafting its own environment protection measures for offshore oil exploration and development. From the outset, the Company has been complying fully to these conventions and laws and their implementation procedures. No incident of marine environment pollution occurred.

COSL implements in full the Bohai Blue Sea Action Plan promulgated by the State Council, and the Procedural Regulation on Lead Sealing of Pollution Discharging Equipment on Ships in the Bohai Sea issued by the Ministry of Transport. The Company implements a system on lead sealing of pollution discharging equipment for vessels operating in the Bohai Sea to achieve “zero sewage discharge”. For vessels operating in the Bohai Sea for more than a month, with the exception of sealed disposal to onshore locations, direct discharging of oil sewage into the sea is prohibited. All oil sewage is to be recovered by recovery vessels licensed by the authorities. The operation processes are recorded in navigation log books and in greater details in Oil Record Books upon completion of the operation. Supervisory authorities inspect lead sealing procedures regularly to ensure that no oil sewage is discharged into the Bohai Sea. COSL strictly enforces requirements stipulated under Chapter Four of Regulations of The People’s Republic of China on the Prevention of Vessel-induced Sea Pollution, under which maritime authorities and shore-based crew inspect water oil separation facilities, filtering systems and oil discharge monitoring devices regularly to ensure their proper functioning. Working vessels undergoing oil bunkering operation strictly follow rules stipulated in the Bunkering Check List published by maritime authorities. COSL has established relevant operation guidelines in its safety management system, which clearly defines the responsibility of the oil bunkering operator in order to prevent oil spillage.

With reference to international conventions, state laws and regulations, ISM regulations and national standards, COSL has established its Safety Management System (SMS) and QHSE systems to institutionalize the Company's policies on health, safety and environment protection and environment protection management. A series of related laws and regulations are established and modified under these systems. Putting these two systems at work, the Company’s measures on health, safety and environment protection have been implemented smoothly.
　　1. On the marine environment protection front, operational management guidelines including Management Notes on Shipboard Pollution Control, Notes on Bunkering Operation, Notes on Tank Cleaning Operation, Rules of Oil Storage Cleaning, Rules on Safe Usage of Chemical Emulsifiers, Pollution Control Equipment Safety Measures, Rules on Safe Use of Oil-based Mud, Notes on Cargo Loading and Unloading Operations, Notes on Management of Ballast Water, Regulations on Pollution Control Equipment are established in accordance with international conventions and the state laws. These measures can strengthen environment protection and pollution-control management.
　　2. Each COSL’s offshore platform has its own Emergency Plan on Oil Spillage in accordance with the provision stipulated under Article 26, Annex I of MARPOL73/78 to provide practical process for platform staff to follow in case of oil spillage.
　　3. Offshore platforms have their own Waste Management Plans in accordance with provisions stipulated under Annex V of MARPOL 73/78 to standardize waste management on offshore platform.

Over the years, COSL has been investing heavily on renovation of pollution-control equipment and facilities on drilling platform. The investments have been directed to:
　　1) Upgrading large-scale facilities
　　2) Installing household garbage grinders in drilling platforms to ensure that garbage is properly processed up to standards before discharging. Some platforms are also installed with garbage packing machines, which enable all classified garbage can be transported to onshore for further processing.
　　3) Replacing sewage pumps and excretion treatment facilities in several platforms, also reconstructing the sanitary sewers in living areas during recent years. These measures ensure sewage is processed by sewage processing facilities and excretion treatment facilities and up to the sanitary standard before disposal.
　　4) Oil sewage generated by platform operations are processed by oil sewage treatment system to keep the disposed sewage is within environment standard. To ensure this measure functions properly, processed oil sewage samples are sent to onshore for monthly inspection. Offshore platforms are also equipped with oil sewage separators, which separate oil sewage and unwanted oil for further onshore processing on time.
　　5) COSL has heavily invested in zero-discharge constructions in recent years. Environment protection standards on offshore platforms will be escalated to higher levels.
　　6) Pollution-control facilities on offshore platforms are included in the scope of regular PMS maintenance routines to ensure these facilities are in good working conditions. This measure can rule out the possibility of marine environment pollution due to oil leakage.
　　7) Strict control on oil-based mud is enforced on offshore platform. Various measures are implemented during drilling operations to prevent oil-based mud leakage. All mud is sent by towboats to onshore bases for handling. Recycling stations for oil-based mud, treatment additives, oil sewage and waste are established to ensure stringent control on disposal of potential pollutants to marine environment during offshore operations.

Through ongoing training, COSL staff receive a throughout understanding of the objectives of the Company’s safety and environmental protection policies and environment management projects. They recognize the importance of paying respect to the nature and caring for the environment. They understand the marine environment has evolved to be a green home ourselves. Protection of the marine environment will evolve into part of their conscious habit.
　　a. Mobilize staff to study Clean Production Promotion Law of the People’s Republic of China, allowing them to understand the importance of clean production
　　b. Make information including laws, regulations, rules and conventions relating to marine environmental protection more ready available on working platforms and shipboards, mobilize staff to study the Marine Environmental Protection Law and MARPOL73/78 to enhance their understanding of standards for oil and living sewage discharges and waste treatment
　　c. Equip each ship with Shipboard Waste Management Plan, Waste Record Book released by the Marine Safety Administration under the Ministry of Transport and other notices relating to waste treatment. Each ship should assign waste collection points in accordance with the requirements under the Management Plan. Waste should be classified in strict compliance with requirements under this plan
　　d. Display notices relating to marine environmental production, slogans and comic strips to enhance better understanding of our staff on the issue. For example, the waste management notice can be displayed beside the first entrance of the platform and the restaurant so that staff on board can read it easily to boost initial understanding of waste management
　　e. Ships are equipped with special log books to record all activities relating to pollution control, including pollution control equipment, implementation details, oil sewage treatment and discharge conditions, treatment, discharge and abandonment of other wastes, occurrences and remedies to spills and leakages, use of chemical emulsifiers, etc.

　　1. Level by Level monitoring to ensure smooth implementation of the Company’s various environmental protection measures.
　　2. Through conducting internal audits under safe management system, the Company looks regularly into various marine production units to monitor implementation of safe environmental production measures in every production step. Good practices are to be promptly promoted while bad practices are subject to review and change.
　　3. The Company will conduct irregular safety checks to identify safety and environmental protection issues and enact appropriate remedial measures. It also require the operating units to conduct system checks on a quarterly basis on equipment on platforms and shipboards prone to introduce pollution to allow prompt reconciliation of problems, if any. The Company will deploy more resources on pollution control and assign special personnel to take charge of pollution related issues.
　　4. In accordance with provisions under the MARPOL73/78 Convention, China Classification Society (CCS) requires checks on ships deployed for serving production sharing contracts to be done on an irregular basis. All pollution control equipment, including oil/water separating equipment, oil sewage treatment equipment, waste treatment equipment, needs to apply for CCS accreditation before they can be on board for marine operations.

　　1. In terms of emergency management for oil spill incidents, every platform or rig is equipped with Shipboard Oil Pollution Emergency Plan and Marine Pollution Emergency Plan issued by relevant marine authorities. Drills on implementing these plans are conducted regularly as per required.
　　2. Emergency response procedures, oil spill emergency solutions and chemical cargo leakage emergency solutions had been developed for platforms and rigs to enable them to initiate prompt remedies in accordance with the written solutions in case of pollution emergencies. These procedures are put in place to allow instant and effective control and treatment to be exercised in emergencies on shipboards and rigs.
　　3. Regular drills on oil spill and pollution control procedures are to be conducted regularly on all platforms and rigs in accordance with system provisions. Details of the drills are to be recorded in deck log books and the Shipboard Oil Pollution Emergency Plan. Ships are required to participate in drills on oil spill recoveries organized by industry organizations. Records of the drills are to be inspected regularly by marine authorities and shore-based crews. Sporadic drills are to be conducted on location to audit the effectiveness of the regular drills and correct infidelities in implementation when necessary.
Ever since COSL’s establishment, thanks to the diligent hard work from all staff members, the Company has been able to contribute positively to the offshore oil exploration and extraction industry while playing its part in protecting the environment through a serious of activities including perfecting its Safety Management System (SMS) and Quality, Health, Safety and Environment (QHSE) standards, putting its implementing its protection measures and strengthening its recognition of the importance of environmental protection.