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Deadlock as PTT hit by big claim over oil spill

May 07. 2017
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Thai firm alleges Indonesia refuses to settle after years of dispute and Bt70 billion suit filed in Court

THE INDONESIAN government and Thailand’s PTT Exploration and Production plc (PTTEP) are locked in a multi-billion-baht legal dispute over alleged environmental and other damages resulting from the massive 2009 Montara oil spill affecting Indonesia’s territorial waters.

The company has suggested that the Jakarta government did not cooperate in settling the dispute out of court.

Indonesia filed a lawsuit in a Jakarta court recently against PTTEP and its subsidiary, PTTEP Australasia (Ashmore Cartier), or PTTEP AA, seeking US$2 billion (Bt70 billion) in compensation.

PTTEP AA operated the Montara oil field north of Australia and adjacent to Indonesian waters.

Its parent firm PTTEP said yesterday that PTTEP AA had taken immediate action to tackle the consequences of the oil spill in 2009. 

In coordination with the Australian government, independent environmental specialists were commissioned to evaluate the impact of the massive spill. However, study results allegedly showed that there were no environmental or ecological impacts in Australian or Indonesian waters.

The company said satellite images, trajectory modelling and other scientific methods were used in the evaluation process in which most of the oil spill did not reach Australian or Indonesian shores.

However, in 2010, the Indonesian government began seeking compensation for alleged environmental and fishery damages from PTTEP and PTTEP AA resulting from the spill. 

As a result, the Thai firm and its subsidiary informed Indonesia that PTTEP was ready to negotiate in good faith over any proven damages. The company said it had submitted study results from independent experts to Indonesia.

There were rounds of negotiations and an effort to sign a memorandum of understanding with the Indonesian government to settle the issue amicably, the company said. 

However, Indonesian authorities reportedly did not provide detailed documents to the Thai side to prove ecological and fishery damages.

In addition, PTTEP AA officials were allegedly barred from entering areas relevant to the dispute.

According to PTTEP, it is ready to take responsibility and pay for damages if they can be proven scientifically.

Jakarta sceptical

However, Indonesia’s deputy minister for maritime affairs, Arif Havas Oegroseno, said the Jakarta government did not believe the Thai firm was serious in handling the issue, resulting in its decision to file the Bt70-billion lawsuit.

According to the Indonesians, an independent commission that included former Indonesian and Thai foreign ministers could not resolve the issue as PTTEP failed to show up to sign an agreement on the oil spill issue in 2012. 

That failure to show, they said, constituted a “clear signal” that PTTEP was not serious in resolving the issue.

In addition, about 13,000 Indonesian seaweed farmers last August filed a $200-million Australian dollar (Bt5 billion) class action lawsuit against PTTEP AA in Sydney claiming the oil spill had devastated their livelihoods.


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