Lapindo spends US$85.9 million on handling Porong mudflow problem

PT Lapindo Brantas, a wholly owned subsidiary of JSX-listed PT Energi Mega Persada (EMP) said that up till now, the cost for handling mudflow from Banjar Panji-1 exploration well in Brantas PSC onshore East Java has reached up to US$85.9 million.

The huge funds (for handling the mudflow) is temporarily spent by Lapindo that controls 50 percent shares which, operates the Brantas PSC and Santos that owns 18 percent shares has expressed its commitment to bear the cost, said EMP?s chief commissioner Suyitno Patmosukismo in Jakarta Tuesday

Meanwhile, JSX-listed oil and gas firm Medco Energi Internasional that owns 32 percent has not yet expressed its commitment to bear the cost.

Earlier, Medco said that it had sent a letter on Oct. 16 to inform Lapindo on its decision to go to the international arbitration to settle their dispute over the cost of the mudflow they have to share in dealing with the massive mudflow.

According to Suyitno, of the US$85.9 million, about $37.5 million has been earmarked for relief well efforts, $8 million for pumping and channeling the mud to a nearby sea through Porong River, $14 million for buying land, houses and rental houses as compensation for the affected families.

Another $26 million has been spent on building a 10 km-dike to prevent the mud from spreading and the remaining has been used for meeting the affected residents needs, such as food, health and school.

?We go on trying to handle the problem and we will buy land and houses for residents affected by the mudflow as we are a socially responsible company,? he said. (denny)