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Jakarta Post

Fresh Lapindo drilling '€˜could pay off company'€™s debts'€™

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Sat, January 9, 2016   /  05:05 pm

Vice President Jusuf Kalla has said that the planned redrilling of a gas well near the center of a mudflow in Porong, Sidoarjo, East Java, by oil and gas company PT Lapindo Branta '€” which is controlled by the family of businessman and Golkar Party chairman Aburizal Bakrie '€” could generate money that the company could use to pay off its debts to the government.

'€œThat'€™s how things should work. [Lapindo] could pay its debts '€” the government has been giving it funds long enough. How can they pay if they don'€™t start drilling?'€ Kalla asked as quoted by Antara on Friday.

Fresh drilling, he said, would be environmentally sound, with clearance having been issued by the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas).

'€œIf SKKMigas has given the nod and it'€™s safe, they can go ahead, no problem,'€ Kalla said.

Workers from the company began their drilling operation on Wednesday at the Tanggulangin 1 well in Kedungbanteng subdistrict, Tanggulangin district, Sidoarjo, some 5 kilometers from the center of the mudflow in Porong.

Company spokesman Arief Setya Widodo said the drilling at Tanggulangin 1 would be for gas rather than for oil, as had been the case with the Banjar Panji-1 well, which is believed by many to have caused the 2006 flow of hot mud that inundated thousands of houses in Porong.

The company expects drilling at Tanngulangin to be over in a matter of weeks.

SKKMigas has encouraged the company to increase production to meet demand for gas in East Java.

Lapindo'€™s gas production at the Tanggulangin 1 well is predicted to reach 5 million cubic meters per day. If combined with the production of some 30 wells already in operation in Sidoarjo, production would reach 8 million cubic meters daily.

The new drilling operation kicked off while many victims of the Porong mudflow remained uncompensated more than nine years after the disaster struck.

Of the 3,331 compensation claims filed, 86 remain unresolved because of issues surrounding verification of land ownership.

The government earlier agreed to bail out the powerful Bakrie family to settle the remaining compensation for victims of the mudflow disaster, providing a Rp 781 billion (US$62 million) loan to PT Minarak Lapindo Jaya.

The company claims it has so far spent Rp 6.1 trillion on dealing with social and physical issues arising from the mudflow.

Green groups, meanwhile, have spoken out against the government'€™s decision to allow Lapindo to resume drilling so close to where the disaster occurred.

The Indonesian Forum for the Environment (WALHI) said that the new drilling activity could result in a repeat of the mudflow disaster.

Walhi executive director for East Java Ony Mahardika said the new well Lapindo plans to drill was located only 2 kilometers from areas currently still buried under the mud.

Coupled with what he called Lapindo'€™s '€œpoor drilling standards'€, taking up drilling in the area could increase the risk of another disaster, Ony said as quoted by Bisnis Indonesia daily.

The government, he stressed, should protect the local people from the possibility of another disaster that could occur in the area.

'€œThe government should come up with a mechanism to protect the lives of people living in densely inhabited industrial areas. That is why Lapindo'€™s plan to conduct drilling activities must be rejected,'€ Ony said.

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