RPT-Indonesia Energi expects progress on mud torrent
Source: Reuters
(Repeats to additional Reuters subscribers) JAKARTA, Dec 21 (Reuters) - An Indonesian energy firm, blamed for a torrent of hot mud gushing from the ground after a drilling accident, expects to make progress in tackling the problem in coming weeks, its chief said on Thursday. Anger has been mounting in the area over the hot mud, which has continued to gush despite several government contingency plans to plug the leak, also blamed for a gas pipeline explosion in the area that killed 13 people. More than 10,000 people have been displaced and entire villages inundated by the mud that has flowed since the drilling accident in May in Sidoarjo, an industrial suburb of Surabaya, Indonesia's second largest city. "I think we have more experts than we can think of working on these wells," Christopher Newton, president director of PT Energi Mega Persada Tbk <ENRG.JK>, told reporters. "We've got all the experts that we can working on it, and God willing, in a couple of weeks we should make some progress," Newton said during a public hearing. Energi indirectly controls Lapindo, which holds a 50 percent stake of the Brantas block where the drilling accident occurred. It is owned by the Bakrie Group, which is controlled by the family of Indonesia's chief social welfare minister, Aburizal Bakrie. The government -- including Minister Bakrie -- has said Lapindo should be held responsible for the disaster. Lapindo has agreed to pay 2.5 million rupiah ($273.5) per square metre for swamped land and damaged buildings, and 120,000 rupiah per square metre for inundated rice fields, but Newton said the total cost has not yet completely calculated. "Our estimation is still $180 million plus land compensation. The estimation of the land compensation is still in progress, there are some technical issues that need to be resolved around certificates and ownerships. So we are not in a position to give you an estimation," Newton said. A total of 400 hectares (1,000 acres) of land in East Java has been affected by the mud, Basuki Hadimulyono, head of the national task force to tackle the mudflow, said this month. According to Reuters calculations, that would mean a compensation of $235.5 million.
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