Indonesia to make formal claim in Timor spill

Adianto P. Simamora, The Jakarta Post 24 Aug 10;

The government says it will file an official claim on Wednesday with Thai oil and gas company PTTEP Australasia for environmental damage caused by an oil spill in the Timor Sea.

Rote Ndao Regent Leonard Haning said he wanted more than Rp 7 trillion (US$784 million) in compensation for environmental damage of and economic losses to the regency, which has been the region most greatly affected by the disaster.

Environment Minister Gusti Muhammad Hatta said that negotiators from Indonesia and PTTEP Australasia would meet on Aug. 25 in Perth.

It will be the second meeting after the PTTEP Australasia oil platform exploded in the Montara field off Australia’s north coast in August 2009. The first meeting was held last month, also in Perth.

“The Indonesian negotiating team will mention a sum for financial compensation, which will be based on estimated environmental, social and economic losses from the oil spill,” he told reporters on Monday.

Gusti declined to say what sum Indonesian negotiators would propose.

A source who declined to be named said Indonesia would likely demand Rp 19 trillion in reparations, which would include Rp 7 trillion for Rote Ndao.

Chief Indonesian negotiator Masnellyarti Hilman also declined to comment on the proposed amount for compensation.

Masnellyarti said that the total area affected by the oil spill has continued to increase.

“Satellite imaging shows the impacted area is only 28,662 square kilometers but our field findings indicate the spill has spread to over 70,341 square kilometers,” she said.

Masnellyarti said that Indonesia has spent Rp 1.9 billion to date on operational costs such as surveys, meetings and visits to Perth.

The proposal that PTTEP will receive includes a calculation of the damage to the ecosystem, she said.

“We have computed the need for restoration of ecosystems such as mangrove, coral reefs, sea grass and seaweed,” she said.

The International Maritime Organization (IMO) said it would take 10 years for the coral reef and mangrove ecosystems to recover while marine life would require two years.

The Rote Ndao regent said that he would ask for Rp 7.9 trillion in financial compensation.

“The oil spill disaster has affected the livelihoods of more than 21,000 fishermen in 48 villages in Rote Ndao regency,” Leonard said.

“The figure includes the cost of restoring the damaged coastal ecosystem and other social effects, such as transportation and education,” he told reporters.

Transportation Minister Freddy Numberi, who is also Ocean Oil Spill Emergency Situations National Team head, previously said the government would seek initial compensation of Rp 500 billion for direct losses.

Samples collected by the Energy and Mineral Resources Ministry indicate that the hydrocarbons it found in the Timor Sea were similar to samples taken from the Montara platform, as previously reported.

The Environment Ministry said its analysis showed the quality of sea water in Timor Sea failed to meet tolerable levels set by Indonesian government.

Indonesia Claims Trillions of Rupiah for Environmental Damage in Timor Sea
TEMPO Interactive 24 Aug 10;

Jakarta:Transportation Minister Freddy Numberi said Indonesia’s claim to the Montara Well Head Platform, in relation to the oil slicks from the Montara Refinery in the Timor Sea, East Nusa Tenggara, will amount to trillions of rupiah.

However, Freddy refused to give details on the exact amount. His office said a study has been completed on related data needed. He said the data can be scientifically tested by the company.

“The company can send a consultant to check the data’s validity,” Freddy said after meeting with the Coordinating Minister for Political, Legal, and Security Affairs and a few other ministers to discuss the arrest of Maritime and Fishery Ministry’s officials in Bintan Bay, yesterday.

He said a team of attorneys from Indonesia will negotiate the data again before it is handed to Montara, today. “We worked overtime to prepare this,” he added.

According to Freddy, the claim is addressed to Montara and not to Australia because Australian fishermen are also impacted by the oil slicks. “Australia will also sue the company and Montara must pay the compensation,” he said.

Freddy said the format of the claim for the Montara case is the same as that for similar cases in Batam.

Montara Refinery exploded in August 2009, polluting the Timor Sea. The pollution spread to the regencies of Rote Ndao, Laut Sawu, Sabu Raijua, and Timor Island’s southern coast. The oil slicks from the Australian company have brought disadvantages to the local people.

SUTJI DECILYA


Indonesia to seek $2.2 bln oil spill claim - source
* PTTEP says not enough evidence to pay Timor Sea spill claim
* Claim to be watched by industry after Gulf of Mexico spill
* PTTEP, Indonesian government officials to meet in Perth
* PTTEP shares reverse gains to be down 0.4 pct (Adds reversal in PTTEP's stock price)
Olivia Rondonuwu and Wilawan Pongpitak Reuters AlertNet 25 Aug 10;

JAKARTA/BANGKOK, Aug 25 (Reuters) - Indonesia plans to seek at least $2.2 billion in compensation from Thailand's state-controlled PTT Exploration and Production Plc (PTTEP) for damage caused by a 2009 oil spill in the Timor Sea, a government source said on Wednesday

But PTTEP chief executive Anon Sirisaengtaksin said the claim was not backed by evidence of economic damage from the oil that spilled into Indonesian and Australian waters after a rig operated by PTTEP Australasia caught fire in August 2009.

The size of compensation, if any, from one of the worst oil spills in Australian history is likely to be watched closely during the massive cleanup in the Gulf of Mexico from BP Plc's blown-out offshore deepwater well.

"We have the final claim now and it will be above 20 trillion rupiah ($2.2 billion), roughly," said the Indonesian source, who declined to be identified because the negotiations are private. "That is what we will put on the table. We understand that we will need to prove the claim based on scientific argumentation."

The impasse comes as PTTEP officials and Indonesian government representatives plan to meet in the Western Australia city of Perth to discuss compensation for the two-month spill.

Indonesia's claim is higher than analysts had expected.

The Jakarta Post newspaper reported on Tuesday that Indonesia's claim would amount to $784 million. That itself is higher than the $55 million Indonesia initially asked PTTEP to pay in damages to local people and fisherman in the area.

PTTEP's Anon said the Thai company had conducted its own studies and found there was not enough evidence of damage to justify paying compensation claims proposed by Indonesia.

"I believe there's not enough," he told Reuters. "We have gathered all evidence from the site.... There should be facts to support the claim."

CONCERN OVER PROFIT FORECAST

The Jakarta Post report knocked PTTEP's stock price down 3 percent on Tuesday and raised speculation that analysts' forecasts for PTTEP's 2010 profit would need to be scaled back.

"If PTTEP needs to immediately book the $784 million as a fine it would lower our 2010 net profit estimate by 28 percent," brokers Kasikorn Securities said in a note to clients.

The stock was down 0.4 percent at 143.00 baht at 0750 GMT on Wednesday, reversing an earlier 0.7 percent rise. It has fallen 2.4 percent this year, compared to the Thai stock market's <.SETI> 21 percent rise.

PTTEP Australasia's West Atlas rig about 250 km (155 miles) offshore spilled about 400 barrels of oil per day into an area known for diverse sea life, drawing calls in Australia for a suspension on new projects and tighter industry regulations.

The rig is located in PTTEP's Montara development, where the start of production was delayed to the middle of next year from late 2009. The rig is owned by Norway's SeaDrill Ltd but operated by PTTEP.

PTTEP has said it is conducting safety tests before demolishing West Atlas and removing the wellhead platform. It plans to install a new platform and processing system. ($1=8975 Rupiah) (Additional reporting by Khettiya Jittapong. Writing by Jason Szep; Editing by Muralikumar Anantharaman)