Indonesian government sues PTTEP over Montara

THE government of Indonesia is suing Thailand’s PTT and subsidiaries PTT Exploration & Production and PTTEP Australasia (PTTEP AA) for 27.5trn rupiah (US$2.1bn) over the Montara oil spill, according to reports.

The Montara rig in the Timor Sea off the northwest coast of Australia suffered a well blowout on 21 August 2009. It triggered a fire which burned for two days, and oil leaked for more than two months before the well was plugged on 1 November. Investigations concluded that a faulty concrete pour and lax regulation had been responsible. All 69 workers on board escaped but it is thought that up to 214,000 bbl of oil was spilled. PTTEP has already been fined A$510,000 (US$375,000) in Australia in 2012.

Associated Press says that Indonesia’s deputy coordinating minister of maritime affairs Arif Havas Oegroseno has now announced that the government launched a lawsuit to claim damage for oil that landed on Indonesia’s coast. Oegroseno told reporters at a press conference that the compensation demand includes US$1.725bn for environmental damage, and US$330m for restoration work. He said that 1,200 ha of mangroves, 1,400 ha of seagrass and 700 ha of corals were damaged by the oil spill. PTTEP AA says the government, has “not shown good intention in resolving the pollution problem”.

PTTEP and PTTEP AA say that they are confident that environmental studies will prove that there is no damage as claimed by the Indonesian government.

 “PTTEP and PTTEP Australasia have not officially received the lawsuit documents and have prepared readiness to defend and proceed with the legal case. According to PTTEP AA’s legal advisors, the confiscation of assets of PTTEP and PTTEP AA could not be conducted based on applicable laws,” said PTTEP president and CEO Somporn Vongvuthipornchai.

The company also says that having previously identified Indonesia as a strategic investment country, it will now suspend further investment decisions until the conclusion of the lawsuit.

According to the Sydney Morning Herald, PTTEP AA is also currently subject to a A$200m class action lawsuit from more than 13,000 seaweed farmers in East Nusa Tenggara, who say that their crops were destroyed and fish killed, devastating their livelihoods and communities.