Tuesday, July 25, 2006

Lapindo suspects: To a higher level

Investigation on hot mudflow disaster from Lapindo Brantas Inc's drilling activities in Sidoarjo, East Java have entered a new level with the naming of three suspects from three related companies.

Media reported today that the three new suspects named by East Java police are vice president drilling of PT Energi Mega Persada Tbk (Nur Rohmat Sawolo), president director of PT Medici Citra Nusa (Yenny Nawawi), and general manager of Lapindo Brantas Inc (Imam Pria Agustino).
Energi Mega is the parent company of Lapindo Brantas, operator with 50% working interest in Brantas PSC. Medici is the sub-contractor assigned by Lapindo for drilling of Banjar Panji-1 well which ended up with unstoppable hot mudflow.
Lapindo's partner in Brantas PSC are PT Medco Energi International Tbk and Australia's Santos with 32% and 18% working interests respectively.
Previously East Java police named six suspects in the case consisted of two Lapindo staffs (drilling supervisor & drilling staff) and four Medici staffs (mainly those involved in drilling activities).
All these suspects are prosecuted for alegedly violating three laws, criminal code, environmental law, and water resources law.
These officials faced five to 15 years in prison if they were found guilty of negligence and 18 years in jail if they were found guilty of violating environment regulations.
Abi Tisnadisastra, the lawyer for PT Lapindo Brantas, told Reuters that
the massive flow of mud that inundated several villages was not a result of human error.
In a related development, companies hit by the mudflow are starting to claim compensation from Lapindo. Hundreds of small medium companies operating in the surrounding area have filed their claims to local authorities and then to Lapindo.
While government officers threatened to review Lapindo's operation in the area, no firm decision made so far. Brantas PSC contributes almost 40% of natural gas revenue for Energi Mega, a company in the merger pipeline with associated company PT Bumi Resources Tbk.
Both Energi and Bumi have postponed their respective extraordinary shareholders meeting to vote on the merger as Bumi has not completed the divestment of two coal mining companies, PT KPC and Arutmin, for US$3.25 billion to Borneo Lumbung Energi.
Both Borneo and Bumi are waiting consent letters from KPC and Arutmin contractor (Thiess) and equipment leasing company (Mitsui).

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