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Santos Defends $US79M For Indonesian Clean-up

SANTOS has rejected suggestions that the $US79 million it has set aside to pay for its share of the Indonesian mudflow disaster is inadequate.

CAMERON ENGLAND, September 15, 2008 11:30pm

Reports yesterday quoted a United Nations Environment Program report, which said Santos’ share of the clean-up costs for the disaster could run as high as $830 million.

UNEP spokesman Nick Nuttal yesterday cautioned that the report was “very much in draft form”.

“Thus any findings released publicly now simply cannot be endorsed by UNEP, neither can any of the assertions, suggestions, observations or recommendations reported in the Australian press,” he said via email from Nairobi.

Santos was a non-operating 18 per cent partner in drilling for gas at Sidoarjo in Indonesia, which experts say probably triggered a well blow-out and the subsequent mudflow disaster.

The drilling at the site was conducted by Lapindo Brantas – part of a conglomerate owned by one of Indonesia’s richest families, of which People’s Welfare Minister Aburizal Bakrie is a member.

The mud has continued to flow since the incident in May, 2006, and was estimated recently to be averaging 100,000 cubic meters a day.

The mud has so far displaced an estimated 40,000 people and threatens another 60,000.

The Jakarta Post has reported that a government investigation has not yet decided whether the disaster had natural or human-induced causes.

A decision in the South Jakarta District Court late last year, which is being appealed, cited natural causes as the most likely cause of the incident.

In the August edition of Geology, researchers including Australian academic Mark Tingay rejected the hypothesis that an earthquake was responsible, saying an earthquake at the time was too small and too far away to be the cause.

A report on website Tempo Interactive on Saturday quoted Priyo Budi Santoso, deputy-chief of Indonesia’s House of Representatives, as saying that the Lapindo Mudflow Monitoring Team has “not done its job optimally”, with 98 new sources of mudflow discovered.

Lapindo Brantas spokesman, Imam Agustino, was quoted as saying the company had disbursed 4.4 trillion rupiah ($582 million) in managing the mudflow.

The Government has also reportedly allocated 1.194 trillion rupiah ($158 million) to manage the problem in 2009.

© Adelaide Now

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