Thai company will pay for Timor oil spill

Adianto P. Simamora, The Jakarta Post, Jakarta | Sat, 07/31/2010 11:37 AM

PTTEP Australasia has agreed to pay Indonesia compensation for damage to its territory near Timor from an oil spill caused by the Thai company’s rig, an official says.

“They have agreed to pay our claim,” Indonesian advocacy team leader Masnellyarti Hilman said.

An exact amount for compensation is still being calculated by the Indonesian government since the oil slick has expanded to cover over 66,000 square kilometers (sqm) of the Timor Sea.

More than 500,000 tons of oil spilled into the Timor Sea after a PTTEP Australasia oil platform exploded in the Montara field off Australia’s north coast in August 2009.

Negotiators from Indonesia and PTTEP Australasia met for the first time Tuesday in Perth. The two parties have not yet scheduled meetings.

The team will ask the National Aeronautic and Aviation Agency (LAPAN) to perform modelling on the areas affected by the spill before proposing a final amount for compensation, Masnellyarti said.

“We will collect supporting data from the Maritime Affairs and Fisheries Ministry, which previously reported a level of polycyclic aromatic hydrocarbons [PAH] that exceeded marine water quality standards,” she added.

Samples collected by the Ministry of Energy and Mineral Resources indicate that the hydrocarbons now found in the Timor Sea were similar to samples taken from the Montara platform, she added.

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

The ministry sampled sea water in five different areas.

It said that the total suspended density (TSS) of particulate matter in the samples was at 147 milligram per liter (mg/l), far higher than the tolerable level of 20 mg/l.

The East Nusa Tenggara environmental agency also found physical and chemical contamination from the oil spill that exceeded the tolerable level set by the Indonesian government.

The Montara field was developed by the Norwegian and Bermudan-owned Seadrill company and operated by PTTEP Australasia, a unit of PTT, the Thai state-owned oil and gas company.

The company’s oil platform exploded spilled more than 500,000 liters of crude oil into the Timor Sea.

Thirty-eight percent of Indonesia’s sea territory in the Timor Sea was affected by the spill, local fishermen’s catches dropped and thousands of tons of dead shallow water fish and whales were discovered.

The spill also destroyed seaweed farms cultivated by coastal communities in East Nusa Tenggara.

Transportation Minister Freddy Numberi, who is the head of the National Team for Ocean Oil Spill Emergency Situations, previously said the government asked PTTEP Australasia to pay US$5 million in initial compensation to repair environmental damage from the spill.

The initial payment will cover the short-term impacts of the spill, such as losses suffered by fishermen and seaweed farmers in the area, and is estimated to exceed Rp 247 billion, he said

“That was the figure when the oil spill area was still around 56,000 sqm. Now that the area extends over 66,000 sqm. We must recalculate the figure,” he said.

The East Nusa Tenggara provincial administration estimated damage from the oil spill in the short term could reach Rp 806.17 billion.

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