Lapindo spends up to $235 million to handle mud flow

PT Lapindo Brantas has spent a total of US$235 million to handle mud flow from the company's exploration well in Sidoarjo, East Java, General Manager Imam Agustino said in Jakarta Monday.

About $90 million of the total spending was made in cash while the remainders were in the form of contracts, he told reporters following a meeting between national geologists and senior officials of the ministry of energy and mineral resources and oil and gas upstream regulator BPMIGAS on Monday.

During the meeting, the geologists proposed the government to continue with the construction of third relief well in order to halt the mud flow which began in May, last year.

The geologists said the construction of the third relief well could cost the government or Lapindo $550 million. According to Rudi, the geologists believed that the construction of the relief well would be the only solution to stop the mud flow.

The mud flows which began on May 29, 2006 have caused massive mud floods damaging hundreds of hectares of rice fields and residential areas located near the exploration well. Thousand of people have been evacuated due to the mud. (*)