Firm to Sell Unit Involved in ‘Mud Volcano’
JAKARTA ~ Indonesian oil and gas firm PT Energi Mega Persada has said it will sell a unit that caused a massive mud spill in East Java and forced about 12,000 people to flee their homes.
The company said it has signed a sale and purchase agreement to sell its wholly owned unit Lapindo Brantas Inc. to Freehold Group Ltd.
Lapindo Brantas is the operator of the gas well in East Java that overflowed mud into the area that submerged villages, industries and agricultural land since May. The company is now facing a hefty compensation bill.
Energi said in a press release that the sale to the Freehold Group, a company incorporated in the British Virgin islands, will not require approval from the regulator given that the buyer is not an affiliated party.
“Energi Mega Persada believes that the sale is in the best interest of minority shareholders,” the press release said.
It also said that the company had also considered the needs of the people who lost their property and livelihood because of the mud flow.
A previous attempt by Energi to sell Lapindo to Bakrie group affiliate Lyte Ltd failed after the stock market watchdog Bapepam did not give its approval.
The so-called “mud volcano” began erupting in East Java’s Sidoarjo district in May, inundating more than 400 hectares of land.
Several executives of Lapindo Brantas and its contractors will face trial over the spill.
A system of dykes is holding back the steaming mud, which continues to bubble from the earth at a rate of some 120,000 cubic meters each day.
Experts have been working around the clock to channel the mud to the nearby sea amid fears that the impending wet season may cause the dykes to collapse.Filed under: The Nation