PTTEP retaliates against Indonesia’s legal action on Montara spill

May 12, 2017
Thai company PTTEP has reacted quickly to Indonesia’s move to seek $2 billion in civil damages against it relating to the 2009 Montara oil spill in the Timor Sea. The company has decided to suspend all new investment in Indonesia until the issue becomes clear and a conclusion is reached.

Thai company PTTEP has reacted quickly to Indonesia’s move to seek $2 billion in civil damages against it relating to the 2009 Montara oil spill in the Timor Sea. The company has decided to suspend all new investment in Indonesia until the issue becomes clear and a conclusion is reached (OGJ Online, May 10, 2017).

The investment ban will have minimal immediate impact because PTTEP’s only current asset in Indonesia is the Natuna Sea A Project in which it holds 11.5% interest.

This field produces about 1,200 b/d of oil and 224 MMcfd of natural gas, which represents a mere 1% of the company’s total sales.

PTTEP Chief Executive Officer Somporn Vongvuthipornchai says the firm has obtained legal advice that this asset cannot be seized, despite Indonesia threatening to do just that if the company is found guilty in the civil action of polluting Indonesian waters and coastline.

However, looking ahead, the executive said PTTEP will shift its priorities in investment to other countries in Southeast Asia such as Myanmar, Malaysia, and at home in Thailand.

The decision to withhold investment in Indonesia means PTTEP will not participate in the forthcoming release of 14 new areas in the country, including the highly fancied East Natuna Block that has potential to yield 48 tcf of gas.

PTTEP is waiting for a translation of the court papers before it decides on any other measures.

The company has consistently maintained that 98% of the oil spilled from the Montara wellhead platform was contained within Australian waters. It pleaded guilty to causing the spill and was fined $510,000 (Aus.) by Australian courts in 2011. However, it says there was no evidence of oil in nearby reefs, so it does not believe oil could have reached the coastline.

Studies have found there has been no long-term damage in the Timor Sea.