Oil & Gas

Indonesia to file $1.7bn Montara oil spill lawsuit against Thailand’s PTTEP

Indonesia is seeking at least 27.4 trillion rupiah ($1.7 billion) in damages from PTT Exploration & Production (BKK:PTTEP) in a planned lawsuit next year over the Montara oil spill, even after the Thai company reached an initial settlement with farmers in the area.

The lawsuit plan follows PTTEP’s agreement to pay A$192.5 million (US$127 million) to a group of Indonesian seaweed farmers to settle a class action brought by them after the 2009 spill at the Montara oil field in Timor Sea, reported earlier this week.

The government is seeking a bigger compensation from PTTEP for the damages it caused to coral reef, mangroves and marine life, including 4.4 trillion rupiah to fund restoration efforts, Environment and Forestry Deputy Minister Alue Dohong said on Thursday.

Experts are still calculating the total damage costs that “may be bigger” than initial estimates, Dohong said in a press briefing in Jakarta. The calculation process had been held up due to the Covid-19 pandemic.

“The way we see it, we’re getting a little something first, rather than nothing, then we will chase a bigger one,” Purbaya Yudhi Sadewa, who chairs the government’s Montara oil spill taskforce said at the same event.

Dohong outlined that there are several things to be sued, such as damage to sea waters, mangrove ecosystems, seagrass beds, and coral reefs. “We estimate the losses to be nearly Rp23 trillion.”

The Ministry of Environment and Forestry (KLHK) had long intended to file a lawsuit with the Central Jakarta District Court but it was withdrawn out of respect for the class action process being carried out by the seaweed farmers, which has now been settled.

The oil spill started on August 21, 2009, following an explosion and uncontrollable oil spill in the Timor Sea, off the northern coast of Western Australia, that lasted 74 days, until a relief well was drilled that stopped the leak. PTTEP operated the Montara field in Australian waters at the time of the accident, which occurred 250 kms southeast of Indonesia’s Rote Island and reportedly affected thousands of Indonesian seaweed farmers.

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