Freehold Bails on Lapindo

Nov 28th, 2006, in Business & Economy, by

Freehold Group Limited have canceled their purchase of Lapindo Brantas.

Lapindo Brantas Inc., owned by PT Energi Mega Persada, and the major shareholder of the Sidoarjo gas well disaster area, had been going to be bought by Freehold Group Limited of the British Virgin Islands, but this plan has now been annulled, due to its controversial nature having caused many protests.

PT Energi Mega Persada’s Managing Director Christopher B. Newton reported to the Jakarta stock exchange on the 28th: tempo

The company will sign the letter of purchase agreement termination so that share sales are canceled and [the planned sale] legally ends.

Meanwhile the Jakarta Post says that a consortium of Indonesian insurance companies, led by PT Asuransi Tugu Pratama Indonesia, have begun the process of payinging out claims for the damage caused by the mudflow disaster at the Lapindo Brantas gas field in Sidoarjo, East Java.

Syahrir Hamzah, the president director of PT Asuransi Tugu, said that the consortium would pay about $9 million before the end of this year to Lapindo as part of the company’s overall insurance cover of about $25 million.

We’ve already paid out a first claim worth $4.7 million on Nov. 8th.

He explained that the consortium would pay out another $5 million out in the middle of next month.

Syahrir said the consortium was waiting for verification from the loss adjuster before deciding on the exact amount of the next payment.

As the leader of the consortium, PT Asuransi Tugu, which is controlled by state-owned oil and gas company Pertamina, holds 42.5% of the underwriting contract for Lapindo’s Sidoarjo oil exploration work.

PT Asuransi Jasa Indonesia has a 37.5 percent share in the contract, while the remainder is held by other members, including PT Panin Insurance, PT Astra Buana and PT Asuransi Wahana Tata. The consortium is responsible for covering the cost of the physical damage caused by the disaster.

Other insurance companies, including PT Asuransi AIU Indonesia, have a separate contract covering third party losses or third party liabilities resulting from the Sidoarjo mud-volcano catastrophe.

The vice president director of PT Asuransi AIU, Swandi Kendy, said recently that the insurance companies were still waiting for the results of the investigation before beginning to pay out claims.

3 Comments on “Freehold Bails on Lapindo”

  1. Fanglong says:

    Thank you Patung for the information.
    The Sidoarjo mudflow thing is a perfect symbol of let’s call it the present decadence of everything. I’m thinking of writing a book about it all : in French, of course, because in France we never mention this hell-like story, and we have to know at least. I feel so bad about that. Salam!

  2. Parvita says:

    Well, I was surprised to learn Freehold was even considering to by Lapindo Brantas. The company is from British Virgin Islands”¬¶this sound fishy, really. Seems to me that this was just the Bakrie group trying to launder their money, or whatever to keep their stock market prices (haven’t checked what EMP is valued now).

    FYI, there are still discussion regarding whether this is a natural disaster or ‘man-triggered’ disaster. I still believe that Lapindo Brantas is to blame for not operating according to the standard operational procedure of drilling the well, but whether this is a natural disaster or not is still a debate among the geologists in the country.

  3. Fanglong says:

    Thirteen people were killed in the gas explosion, which was caused by pressure on the pipeline in the mudflow containment area.

    “The police did not find any criminal intention on the part of Lapindo or Pertamina. No criminal acts were uncovered in the case so the investigation into the incident is terminated as of today,” Adj. Sr. Comr. I Nyoman Sukena, head of the East Java Police crime unit, said.

    Who is responsible of the gas explosion? Those who allowed the pressure on the pipeline to increase beyond stand, ie the Lapindo mudflow-makers. So, Mr Adj. Sr. Comr., be serious! No “criminal intention”, of course, but maybe criminal lack of attention!

    Sorry Patung, I’m properly obsessed by this bencana lumpur panas.

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