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Muddy waters [Indonesia]

Author: Economist, Published on: 5 October 2006

For the past four months, a steady flow of hot and noxious mud has erupted from the earth, swamping villages, factories and rice paddies [in] Indonesia...and 13,000 people have been evacuated from the area...12 more villages are in pressing danger of being swamped...[The mud-flow]...erupted 150 metres from where a gas company called PT Lapindo Brantas [part of Energi Mega Persada] was drilling a 3km exploratory well. The company...has not accepted that it was responsible for the eruption...[b]ut some experts have alleged that the company was using unsafe drilling methods...Another company involved in the drilling, PT Medco Energy, has accused a drilling subcontractor called Federated International (2000)...of “gross negligence”. A criminal investigation into the causes of the disaster has made slow progress...Despite its denial of responsibility, Lapindo has so far spent more than $75m on compensation, containment and clean-up...Indonesia's central government took over managing [the crisis] last month...[it] has decided to try to divert the mud into the sea...Environmentalists say that this threatens to cause a second disaster...

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Related companies: Energi Mega Persada MedcoEnergi