Lapindo agrees to pay compensation

Lapindo Brantas Inc., the operator of Brantas PSC, agrees to pay compensation to all victims of the hot mudflow disaster in Sidoarjo, East Java, who have lost their houses and land.

The compensation will be paid gradually, at the latest by 2008, vice president of PT Energi Mega Persada (EMP) Yusuf M. Martak announced Monday.

Lapindo will pay Rp 2.5 million ($273.2) per square meter for swamped land and damaged buildings, and Rp 120,000 per square meter for inundated rice fields, Yusuf said

Some 10,000 people were displaced and entire villages inundated by the mud that has flowed since a drilling accident from Banjar Panji-1 exploration well in May, causing an unfolding environmental disaster.

EMP through its subsidiary Lapindo Brantas owned 50 percent stake in Brantas PSC. The other shareholders are Medco Energi International (38 percent) and Australia's Santos Ltd. (12 percent). (*)