Indonesia seeks $2bn in compensation from Thai state oil firms

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The Indonesian government sued Thailand’s state-owned oil companies PTT and PTT Exploration and Production (PTTEP) for more than $2 billion for alleged damage to the environment from an oil spill in the Timor Sea in 2009.

In the spill in the Montara field north of Australia, thousands of barrels of oil leaked for close to ten weeks following a blowout at the rig operated by PTTEP Australasia. It was the worst offshore drilling accident Australia ever witnessed, but PTTEP was just fined $394,000 by a Darwin court after pleading guilty in 2011 to charges related to workplace health and safety, as well as failure to maintain good oilfield practice.

Indonesia alleges, however, that the oil spill also polluted seawater and coastal areas in the nation’s East Nusa Tenggara province, and filed a lawsuit on May 3 in a Jakarta court seeking 27.5 trillion rupiah ($2.1 billion) for damages and restoration costs.

The government is also seeking to freeze the firms’ assets in Indonesia and overseas, Arif Havas Oegroseno, Indonesia’s deputy minister for maritime affairs, said, arguing that the oil spill killed and damaged a huge area of coral reefs, seagrass meadows and mangroves in Indonesia.

Over the years, Indonesia had tried to negotiate with PTT to come to a resolution but was not satisfied with their response, he added.

PTTEP Australasia, in turn,  maintains its position that “no oil from Montara reached the shores of Indonesia and that no long-term damage was done to the environment in the Timor Sea.” The company emphasised that it “always acted cooperatively and in good faith” in its past discussions with the Indonesian government, and will continue to do so.

In a separate class action suit, around 15,000 Indonesian seaweed farmers are seeking more than $152 million from PTTEP Australasia to cover damages from the spill, claiming the accident devastated their livelihoods. The next hearing in this lawsuit is due to take place at the end of May.

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The Indonesian government sued Thailand's state-owned oil companies PTT and PTT Exploration and Production (PTTEP) for more than $2 billion for alleged damage to the environment from an oil spill in the Timor Sea in 2009. In the spill in the Montara field north of Australia, thousands of barrels of oil leaked for close to ten weeks following a blowout at the rig operated by PTTEP Australasia. It was the worst offshore drilling accident Australia ever witnessed, but PTTEP was just fined $394,000 by a Darwin court after pleading guilty in 2011 to charges related to workplace health and safety,...

Reading Time: 2 minutes

The Indonesian government sued Thailand’s state-owned oil companies PTT and PTT Exploration and Production (PTTEP) for more than $2 billion for alleged damage to the environment from an oil spill in the Timor Sea in 2009.

In the spill in the Montara field north of Australia, thousands of barrels of oil leaked for close to ten weeks following a blowout at the rig operated by PTTEP Australasia. It was the worst offshore drilling accident Australia ever witnessed, but PTTEP was just fined $394,000 by a Darwin court after pleading guilty in 2011 to charges related to workplace health and safety, as well as failure to maintain good oilfield practice.

Indonesia alleges, however, that the oil spill also polluted seawater and coastal areas in the nation’s East Nusa Tenggara province, and filed a lawsuit on May 3 in a Jakarta court seeking 27.5 trillion rupiah ($2.1 billion) for damages and restoration costs.

The government is also seeking to freeze the firms’ assets in Indonesia and overseas, Arif Havas Oegroseno, Indonesia’s deputy minister for maritime affairs, said, arguing that the oil spill killed and damaged a huge area of coral reefs, seagrass meadows and mangroves in Indonesia.

Over the years, Indonesia had tried to negotiate with PTT to come to a resolution but was not satisfied with their response, he added.

PTTEP Australasia, in turn,  maintains its position that “no oil from Montara reached the shores of Indonesia and that no long-term damage was done to the environment in the Timor Sea.” The company emphasised that it “always acted cooperatively and in good faith” in its past discussions with the Indonesian government, and will continue to do so.

In a separate class action suit, around 15,000 Indonesian seaweed farmers are seeking more than $152 million from PTTEP Australasia to cover damages from the spill, claiming the accident devastated their livelihoods. The next hearing in this lawsuit is due to take place at the end of May.

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