Lapindo Brantas to drill new well, despite mudflow

JAKARTA. Lapindo Brantas will begin drilling a new gas well in Tanggulangin, near the site of the mudflow disaster in Sidoarjo, East Java, the government says.

The Bakrie Group subsidiary had obtained permission from local residents, although some rejected the proposal on fears it would trigger a another mudflow, as happened in 2006, upstream oil and gas regulator BPMigas spokesperson Gde Pradnyana said.

“The financial plan for the project has been approved by BPMigas. As to the location, it depends on the regional government. We don’t know yet about that. We have to do drilling to compensate for declining gas production from existing wells,” he said in Jakarta on Monday.

Lapindo Brantas has not obtained permission from the regional government to drill in Tanggulangin because it has not fully paid compensation to mudflow victims at the Banjarpanji well.

The company has reportedly paid only Rp 2 trillion (US$216 million) of Rp 3 trillion in required compensation to victims.

In a statement sent to the media over the weekend, BPMigas reported that Lapindo had signed an agreement with Tanggulangin residents to pay compensation for future damages.

Lapindo Brantas was drilling the Banjar Panji I well in Sidoarjo in March 2006 when it spewed hot mud that inundated and destroyed thousands of homes in the area, forcing mass evacuations and leading Lapindo Brantas to stop operations. Six years later, more than 10,000 cubic meters of mud a day continue to spew forth.

The well in Tanggulangin has been estimated to have a total gas output of 5 million standard cubic feet per day (mmscfd), Gde said.

The gas would be channeled to nearby households to support the government’s city gas program,
he added.

Currently, Lapindo is exploiting gas from the Carat field, also in Sidoarjo, with an output of 5 mmscfd.

The gas is channeled to Surabaya, East Java, and used in the transportation sector. However, BPMigas estimates the gas will run out within five years. “Drilling [in Tanggulangin] has to be started as soon as possible before the existing gas [at Carat] runs out,” Gde said.

To support the government’s city gas program, the Energy and Mineral Resources Ministry said that it budgeted Rp 230 billion to add 16,000 new household gas connections in five cities across the country this year: Prabumulih, South Sumatra; Jambi; Cibinong and Cirebon in West Java; and Kalidawir, East Java.

Since the program began in 2009, 38,085 households have been connected to gas in eight cities in Java, Kalimantan, Sumatra and Sulawesi. Eleven apartment complexes in Greater Jakarta have also been connected.

East Java’s gas is supplied in whole by Lapindo Brantas, which is wholly owned by publicly listed PT Energi Mega Persada (ENRG), a subsidiary of the Bakrie Group. (Rangga D. Fadillah/ The Jakarta Post)