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fter almost two years of tough negotiations, the Indonesian government and Thai-based oil rig operator PTTEP Australasia have agreed to sign a memorandum of understanding to settle disputes over an oil spill in the Timor Sea.

Chief Indonesian negotiator Masnellyarti Hilman from the Environment Ministry said the MoU would outline the phases and mechanism of the compensation payment to the country.

“The agreement will be a manifestation of PTTEP’s commitment to settle the disputes over the oil spill. However, we can’t disclose detailed contents of the agreement because negotiations are still underway,” she said at a discussion held by Indonesian Resources Studies (Iress) in Jakarta on Tuesday.

A PTTEP Australasia oil platform in the Montara field off Australia’s north coast exploded in August 2009, leaking 2,000 barrels of oil a day before the spill was halted in November 2009.

Indonesia began negotiations for financial damage in July 2010 and submitted the claim documents for compensation to the company in October that year.

Earlier reports said Indonesia was seeking US$2.4 billion but the company only agreed to provide $5 million in the form of corporate social responsibility (CSR) programs to assist affected fishermen in the Timor Sea.

Masnellyarti emphasized that the government would continue efforts to demand financial compensation from the company, not only CSR programs.

“We’ll never give up,” Masnellyarti, who is also deputy minister for hazardous substances, hazardous waste and solid waste management at the Environment Ministry, said.

People’s Coalition for Fishery Justice (KIARA) secretary-general M. Riza Damanik, who also spoke at the discussion, suggested the Indonesian government step up diplomacy with the Australian government to persuade the latter to urge PTTEP to pay the requested compensation.

“This move will benefit the Australian government too because they have to clear the public perceptions that they are protecting a company that has damaged the environment. That’s why we think the Australian government needs to impose sanctions against the company,” he said.

Another strategy the Indonesian government could use would be to freeze all operations of PTTEP subsidiaries in Indonesia.

In May 2010, the government granted four PTTEP subsidiaries the right to enter the country’s oil and gas sector.

The four companies operate in the Makassar Strait.

PTTEP Malunda was selected to be the sole operator of exploration activity in the Malunda block, while PTTEP South Mandar ran exploration in the South Mandar block.

The two other subsidiaries are PTTEP Sadang, which, together with Talisman Sadang BV, are exploring for oil and gas in the Sadang block and Sageri, which together with Talisman South Sageri BV, are exploring in the South Sageri block.

Apart from environmental damage, the oil spill has also resulted in an increase in the smuggling of illegal immigrants to Australia through Rote Ndao in East Nusa Tenggara, Heri Soba from the Care for West Timor Foundation (YPTB) said.

“Fishermen felt that because of the spill, they would be better off selling their boats to illegal immigrants than to continue fishing, which was badly affected by the spill,” he said.

Surabaya’s Sepuluh November Institute of Technology (ITS) said Tuesday it would conduct studies on pollution in the Timor Sea caused by the 2009 oil spill.

“We are currently designing the research program,” ITS West Timor Foundation head Ferdi Tanoni said in Kupang, East Nusa Tenggara, on Tuesday. Ferdi said ITS would deploy seven researchers to Kupang for the project.