Timor Sea Oil Spill: PTTEP Australasia accepts blame

Nani Afrida, The Jakarta Post 15 Dec 10;

Thailand-based oil and gas producer PTTEP Australasia has finally acknowledged responsibility for an oil spill in the Timor Sea that occurred in 2009, an Indonesian minister said, clearing conditions for trillions of rupiah in compensation for Indonesia.

“We met with them and they confessed. Actually, we needed that confession,” Transportation Minister Freddy Numberi said in Jakarta on Tuesday.

The company will hold another meeting with the Indonesian government to discuss the extent of the contamination, Freddy said.

“We’re still demanding Rp 23 trillion [US$2.56 billion] in compensation from the company for the damage,” he said.

Previously, Rote Ndao Regent Leonard Haning said he was seeking more than Rp 7 trillion in compensation for environmental damage and economic losses to the regency, which has been worst hit by the disaster.

PTTEP, however, has never publicly acknowledged it would pay, although a number of Indonesian officials had claimed that the company was willing to pay.

An Indonesia negotiator said the acknowledgment would allow Indonesia to claim trillions of rupiah in environmental damages and economic losses if not the maximum demand, even if the case was brought to international court.

“It can be used as our argument in the negotiations,” he said.

PTTEP Australasia’s oil platform in the Montara field off Australia’s northern coast exploded and spilled more than 500,000 liters of crude oil per day into the Timor Sea in August 2009.

The spill reportedly affected 38 percent of Indonesia’s marine territory in the Timor Sea. Local fishermen’s catches reportedly dropped and thousands of tons of shallow water fish died, while marine mammals, including whales, also fell victim.

Chief Indonesian negotiator Masnellyarti Hilman earlier said the total area affected by the oil spill 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 more than 70,341 square kilometers,” she said.

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

The proposal the government will send to PTTEP includes calculations on the damage to the ecosystem, she said.

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

Oil Spill Reached Indonesia, Australian Firm Said to Admit
Fidelis E. Satriastanti Jakarta Globe 15 Dec 10;

Jakarta. An Australian company whose offshore platform blew out in August last year has finally admitted that the resulting oil spill reached Indonesian waters, Transportation Minister Freddy Numberi said on Wednesday.

Freddy said the admission was made in an official letter from the company, PTTEP Australasia, a subsidiary of Thailand’s PTT Exploration & Production.

“The company sent out an official letter to me admitting that Indonesian waters had been contaminated, in this case the Timor Sea, by the oil spill,” said the minister, who heads the country’s team handling the spill.

“With this, we are hoping that the company will be able to work out the compensation mechanism and its stages.”

PTTEP Australasia, in its initial findings released on Nov. 19 following a joint study with the Australian government, said the oil spill had not reached the Indonesian coast. It added that 98.6 percent of the spill was contained in Australian waters.

Indonesia claims that the spill affected 78,000 square kilometers of its waters, disrupting the livelihood of thousands of East Nusa Tenggara residents.

Indonesia has claimed Rp 23 trillion ($2.5 billion) in damages.

A few days after the findings were announced, Canberra said it had found that the company had failed to observe “sensible” practices at its Montara oil platform.

It also criticized the Australian regulator overseeing the project, saying its “minimalist approach” to its responsibilities gave it little chance of discovering the company’s poor practices.

Freddy said the Indonesian government, the company and Australian representatives would meet today to discuss the latest findings.

Anthony Albanese, Australia’s minister for infrastructure and transportation, said two senior officials — the deputy head of the Australian Maritime Safety Authority and the deputy secretary of the Australian Department of Resources — would meet with Indonesian officials to discuss the results of the inquiry.

On compensation, Albanese said that it was a matter for the Indonesian government and the company to settle.

“What Australia will do is to make sure that we will make available to the Indonesian government the facts and findings of the inquiries that have taken place,” he said.