Indonesia sues Thai exploration company for $2bn over 2009 oil spill

The Indonesian government is seeking more than $2bn in compensation from a Thailand-based exploration company over an oil spill in the Timor Sea that occurred back in 2009. A civil suit was filed on 3 May in a Jakarta court against PTTEP Australasia and its parent company, the state-owned PTT Exploration and Production. The spill resulted from a blowout at a rig in the Montara oil field off the northern coast of Australia. Thousands of barrels of oil leaked into the sea during the course of ten weeks, making it Australia’s worst ever offshore drilling accident. Indonesia is seeking 27.4 trillion rupiah ($2bn) for environmental damage after the oil spread to its waters, including a large area of coral reefs, seagrass meadows and mangroves. The government is also seeking to freeze PTTEP assets in Indonesia and other overseas states, and also suspend any licenses. “This is an effort to seek justice for the PTTEP oil spill,” said Arif Havas Oegroseno, deputy minister for maritime affairs. Negotiations between PTTEP and the Indonesian government have been ongoing for years but Indonesia has lost patience with what it believes is a lack of engagement from PTTEP. Mr Oegroseno cited the failure of an independent commission featuring both Indonesian and Thai foreign ministers to resolve the issue, due to PTTEP’s refusal to sign an agreement back in 2012, a “clear signal” that the company was not taking the case seriously, he said. PTTEP was also hit with a $150m class action lawsuit from a group of 13,000 Indonesian fishermen last August, claiming that the oil spill damaged their livelihoods. The exploration group has responded to the latest lawsuit by suspending investment in Indonesia. "As of today, PTTEP made the decision to suspend any new investment until the issue becomes clear and a conclusion could be reached," chief executive Somporn Vongvuthipornchai told reporters in Bangkok on Tuesday. He said this could mean that more than one "potential merger and acquisition project" will be shelved. "We will shift our priorities in investment expansion [to] other countries such as Thailand, Myanmar, and Malaysia," he said. PTTEP also insisted that it will keep its one Indonesian operation, the Natuna Sea A Project, open and operating despite the Indonesian government’s threat to seize its company assets. The project’s total sales volume of natural gas is around 224 million cubic feet per day, with approximately 1,200 barrels per day of crude oil, representing 1% of PTTEP’s total sales volume. PTTEP has also questioned the extent of the damage caused by the oil spill, insisting that no oil reached Indonesia’s shore and any impact caused in the Timor Sea was not long term, claiming that it worked closely with environmental experts to assess any potential damage to the marine environment. "By that time, there was no adverse effect on marine life and biodiversity in the Australian and Indonesian seas,” said a PTTEP statement. “The company had also conducted a trajectory modelling and found that most of the oil spill was largely in the Australian waters only. However, there was no damage to both Australian and Indonesian seashores.” The company also said it has tried to work with the Indonesian government to determine the extent of damage but has had no clear response nor been allowed to see the affected area for itself. PTTEP is now waiting for court papers to be translated before taking any further legal action, according to Mr Vongvuthipornchai, although he added that the company will not be provisioning for any more compensation claims. So far, the only payment made in relation to the oil spill was a $375,000 fine imposed by an Australian court in 2011.

Indonesia sues Thai exploration company for $2bn over 2009 oil spill

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