Showing posts with label Disaster / Accident. Show all posts
Showing posts with label Disaster / Accident. Show all posts

Monday, August 16, 2010

Kodeco Platform Paralyzed After Cargo Vessel Crash

Jakarta Globe, Rizqon Bilhuda | August 15, 2010

Indonesia. Kodeco Energy’s platform off the coast of East Java, about 80 kilometers north of Gresik, has been hit by an unidentified cargo vessel, causing a delay in oil production at the site.

Kodeco, which is involved in oil and natural gas exploration and exploitation in the country, operates under the West Madura production sharing contract.

“At this point, it is understood that Kodesco’s KE 40 [platform] is relatively safe. There has been no loss of life, no oil spill and no fire,” Budi Indianto, the deputy of operations for Indonesia’s upstream oil and gas regulatory body, BPMigas, said on Saturday.

Budi said the regulator had conducted a preliminary inquiry into the incident, which took place on Wednesday, but that more investigation was needed.

Also involved in the investigation are the Directorate General for Oil and Gas at the Ministry of Energy and Mineral Resources, Kodeco Energy and the Coast Guard and Navy, which are searching for the cargo vessel.

“Our investigation of Wednesday’s accident is still continuing,” he said.

Budi said there had been no signs yet of an oil spill but that BPMigas and Kodesco would continue to monitor the site and make the necessary preparations in case a leak was detected later.

He said Kodeco had prepared oil booms to safeguard the location, supported by equipment provided by HESS, Santos, JOB Pertamina-Petrochina East Java and Kangean Energy.

“All the basic equipment was moved to the site just three hours after the incident,” Budi said.

According to the Web site of the Ministry of Energy and Mineral Resources, the crash caused the platform to tilt by 40 degrees and caused some other damage, forcing the company to stop operations immediately.

The head of public and institutional relations for BPMigas, Elan Biantoro, said it was estimated that the incident might cause a production loss of 1,600 barrels of oil a day, or 15 million standard cubic feet per day.

Elan said that officials were assessing the stability and safety of the damaged platform, to determine where operations would be able to continue.

He predicted that if cleared, it would take two to three weeks before work at the platform could get back to full-scale production.


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Friday, August 13, 2010

Gulf fishermen: oil tainted our waters, our trust

Reuters, By Leigh Coleman,BILOXI | Thu Aug 12, 2010 2:35pm EDT

Shrimp boats sit idle in the Venice Marina as fishermen await the news of the Gulf of Mexico oil spill in Venice, Louisiana May 3, 2010. (Credit: Reuters/Joe Mitchell)

Mississippi (Reuters) - Some U.S. Gulf Coast fishermen say they have caught crabs with black-stained gills and others report seeing fish and marine life gathering strangely on the sea surface following the massive BP Plc oil spill.

They fear these abnormalities could point to a lasting and potentially devastating impact on their fishing grounds and livelihoods from the world's worst offshore oil accident, and they say BP and the government may be downplaying the issue.

State and federal authorities, who insist they are closely following safety protocols, have begun reopening selected segments of Gulf of Mexicowaters to recreational and commercial fishing after the successful capping and cementing of BP's blown-out deepwater Macondo well in recent weeks.

But fiercely independent Gulf fishermen, many of whom harbor a deep mistrust of authority since the much-criticized government response to Hurricane Katrina in 2005, believe both President Barack Obama's administration and BP may be moving too hastily to close this ecological and financial nightmare.

"The government is telling us the waters and seafood are safe, but I would not feed my family on anything I catch out there now," said Jerry Miller, who has fished off Mississippi's coast for 35 years.

In contrast, President Obama has said publicly that Gulf Coast seafood is very much on the menu in the White House. "Americans can confidently and safely enjoy Gulf seafood once again ... In fact we had some yesterday," he said on Monday.

As a relief well closes in to permanently kill the ill-fated BP borehole, government scientists admit it could be years before the full long-term spill impact on the Gulf's marine ecosystem is known. Nearly 5 million barrels of oil is estimated to have spewed into Gulf waters, but the government says 75 percent has now evaporated or been dispersed or contained.

"The BP Deepwater Horizon incident was without a doubt a very significant environmental disaster ... it will undoubtedly continue to play out for a long, long time," Jane Lubchenco, head of the National Oceanic and Atmospheric Administration, told reporters this week.

But reassurances from the president downward that the administration will not abandon Gulf residents do not convince local fishermen. Many fear they have still not been told the full truth about the toxic effects on sea life of the oil and millions of gallons of chemical dispersants that were sprayed or pumped onto and into Gulf waters to disperse the crude.

'WHO DO YOU TRUST?'

"Fishermen here are calling it 'Voodoo seafood' because we are all cursed," said Bill Thompson of Long Beach, Mississippi. Fishermen from Texas, Louisiana, Alabama, Mississippi and Florida gathered in Biloxi last week to discuss their fears.

"We do not think it is safe but the state officials say it is. Who do you trust? The people that know these waters or the government?" Thompson added.

Some local fishermen say they are seeing strange behavior by marine life -- mullets, crabs and other creatures which normally stay well under water have been sighted congregating on the surface -- and they relate this to the spill.

"It looks like all of the sea life is trying to get out of the water," said Alabama fisherman Stan Fournier. "In the 40 years I have been on these waters I've never seen anything like this before."

Earlier this month, some Hancock County, Mississippi, crabbers reported that when they cracked open their catch they found the crabs' gills tainted black, possibly by oil. But state environmental authorities said shrimp, oyster and crab samples have not shown any dangerous contamination so far.

Federal authorities say they are being extra cautious over seafood safety, but do not immediately have all the answers.

"I think it's fair to say we won't know for some time yet the full impact ... Many of the suspected impacts will be on the juvenile stages, the eggs or the larvae, for example, of fish, but also crabs, shrimp, other species. And it's very difficult to detect as it's happening," NOAA's Lubchenco said.

HUNT FOR SUB-SURFACE OIL

Government and private scientific vessels are out in the Gulf testing the waters and marine catches.

Part of the search is focused on trying to ascertain the full extent of oil that has remained under the surface in the water column -- a hotly discussed subject among scientists.

Crab traps carrying absorbent pom-poms are being lowered to the seabed along the coast to see if they come up with oil.

"If we start losing parts of the ecosystem ... it will be devastating," said Thomas Shirley, a marine biologist at Texas A&M University.

"I am much more inclined to believe fishermen about what they see in the Gulf and what they say about our waters," he said, adding that one critical factor will be any losses to shrimp and crab populations in coming seasons.

BP, which is funding the spill cleanup, has pledged to pay all legitimate economic damage claims and this week made an initial $3 billion deposit into a $20 billion escrow fund established to cover income and livelihood losses.

Many fishermen say the government's close cooperation with BP since the start of the spill in April means all official statements should be treated with caution, if not skepticism.

"We know these waters like the back of our hand. We all know what we see and things are not normal out there," said Lynn Wazenski, a charter boat captain in Gulf Shores, Alabama.

(Writing by Matt Bigg and Pascal Fletcher; editing by Mohammad Zargham)


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Monday, August 9, 2010

Dozens Feared Dead in Latest Indonesian Ferry Disaster

Jakarta Globe | August 09, 2010

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Kupang, Indonesia. At least 11 people were killed and more than 30 are missing after a passenger boat went down in waters off eastern Indonesia on Monday, the country’s search and rescue agency said on Monday.

“We have found 11 dead bodies and still look for about 32 people that went missing,” National Search and Rescue Agency spokesman Gagah Prakoso said.

The boat set sail carrying about 60 passengers at 7:30 a.m. on Sunday and capsized two hours later off Flores island, in East Nusa Tenggara province, he said.

Local police chief Abdul Rahma Aba said that the inter-island vessel was struck by high waves which caused panic among passengers before it capsized about two miles from shore.

Prakoso said that 17 passengers were found alive and searchers including local fishermen continued to hunt for survivors.

The Indonesian archipelago of more than 17,000 islands is heavily dependent on maritime services but its safety record is poor, and fatal accidents are common.

Up to 335 people were killed when a heavily overloaded ferry sank off Sulawesi island in January last year. In December 2006 a ferry went down in a storm off the coast of Java, killing more than 500 people.

Agence France-Presse

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Oil slick concern after ships collide outside Mumbai

RNW, 9 August 2010 - 8:06am

The Indian coastguard was on Monday trying to contain oil from a badly-listing container ship that collided with another vessel close to the city of Mumbai, a defence ministry spokesman said.

Six coastguard ships were working to minimise the impact of the spill from the Panamanian-registered MSC Chitra, while a coastguard helicopter dropped oil-dispersal spray on the slick, Captain M. Nambiar told AFP.

Environmental emergency teams have been put on alert to mobilise for a clean-up operation should the oil reach land, while fishermen have been told not to put to sea until the all-clear has been given.

The vessel, which was five nautical miles from shore when the accident occurred on Saturday, has listed dangerously to its port side. Some 200 containers have fallen from the ship and are being collected.

Nambiar described the ship's position as "precarious", adding: "It's difficult to get on board to locate the point of leakage."

Oil had spread around the ship and could be carried further depending on the tide and current.

Broken patches of oil have been cleared around Elephanta Island, a World Heritage Site and tourist attraction in Mumbai Harbour, the defence ministry said in a statement on Sunday evening.

The MSC Chitra was leaving Mumbai when it was in a collision with the MV Khalijia-II, another Panamanian-registered ship, which was manoeuvring into port.

Thirty-three crew members were rescued. Both ships developed cracks following the collision.



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Indonesian Lawmaker’s Death in Shipwreck Raises Questions

Jakarta globe, Anita Rachman | August 08, 2010

Jakarta. House Commission III overseeing legal affairs plans to discuss lawmaker safety following a maritime mishap that left a legislator and the wife of another dead in North Sulawesi over the weekend.

“We will seriously discuss the issue that state officials, including members of the House, should also get protection at sea,” Achmad Dimyati, a lawmaker from the United Development Party (PPP), said on Sunday.

Dimyati himself had been on board the boat that overturned in Manado. Some 20 lawmakers, some with their families, were aboard.

Setia Permana, a lawmaker from the Indonesian Democratic Party of Struggle (PDI-P), and Wahyu Nurani, wife of Democratic lawmaker Sutjipto, drowned in the accident.

Dimyati said there should be more rigid standards at sea, “not only for state officials, but for all the people. And not only in North Sulawesi, but also across the archipelago.”

He said the doomed ship was not seaworthy, and didn’t receive adequate rescue assistance.

“The boat was not in proper condition,” he said.

“We are sorry that the captain is being held by the police, but there should be someone held responsible for this, so that this same kind of thing won’t happen in the future.”

North Sulawesi Police spokesman Benny Bella told the Jakarta Globe by telephone that the captain, Alex Lahengko, 34, was being detained by the police.

“We aren’t detaining people just because the victims were lawmakers or their families, this is the normal treatment,” he said.

However, Commission III member Nudirman Munir, who was also on the boat when it capsized, said that it was unfair to blame the incident on the captain.

He said the local government should be held responsible because it did not strictly apply and check the safety standards of all boats in the area.

“The municipality of Manado should be held responsible for this,” he said. “The captain is just a regular worker. [The accident happened at] a recreational area. Many people, including foreign tourists, come there. How come they don’t have first aid or lifeguards on the beach?”

Nudirman said that the commission would ask local governments to do a better job of managing their territorial waters.

“Not only in Manado, but in all places, in Maluku and Irian Jaya [Papua], there should be water police patrols and beach guards.

“The police should add to their teams covering the water,” the lawmaker said, adding that local governments should also prohibit people from operating old boats.

Nudirman also took the opportunity to say that lawmakers were not given enough money on working visits to far-off regions. “Rupiah 15 million ($1,700) for a working visit, including the flight and the transportation and the protocols, that’s not enough,” he said.

Eva Kusuma Sundari, from the PDI-P, said that she also got about Rp 15 million for the three- day working visit.

She said the sailing trip had been optional, and several lawmakers, including Ruhut Sitompul, from the Democratic Party, skipped it.

“It was a tragedy,” she said. “If there was really a mistake, it was with the operational standards.

“Without a standardized operational system, people will become victims,” she said.

“Don’t take notice just because the victims were lawmakers. The same treatment should be given to everyone,” she said.

Wednesday, August 4, 2010

Cargo ships collide in South Sulawesi, 7 missing

Andi Hajramuni, The Jakarta Post, Makassar | Wed, 08/04/2010 4:01 PM | Archipelago

Seven crew members went missing after two cargo ships collided in Selayar Strait, South Sulawesi, on Wednesday afternoon. One of the ships sunk after the collision.

The Trisal motor ship was on its way from Makassar to Atpupu, carrying 1,000 tons of cement and 18 crew members, when it collided with Indimatam motor ship at 2:35 p.m. local time.

Eleven crew members of Trisal were rescued by crew members of Tilong Kabila ship, which was passing near the two ships.

Indimatam and its crew of 14 survived the collision and continued its journey from Serui, Papua, to Makassar transporting scrap metal.

Akhriadi, head of sea and beach security of the Makassar Port, told The Jakarta Post that the port authorities were cooperating with the local search and rescue agency and naval base authorities to look for the missing victim.

Saturday, July 31, 2010

Thai company will pay for Timor oil spill

Adianto P. Simamora, The Jakarta Post, Jakarta | Sat, 07/31/2010 11:37 AM

PTTEP Australasia has agreed to pay Indonesia compensation for damage to its territory near Timor from an oil spill caused by the Thai company’s rig, an official says.

“They have agreed to pay our claim,” Indonesian advocacy team leader Masnellyarti Hilman said.

An exact amount for compensation is still being calculated by the Indonesian government since the oil slick has expanded to cover over 66,000 square kilometers (sqm) of the Timor Sea.

More than 500,000 tons of oil spilled into the Timor Sea after a PTTEP Australasia oil platform exploded in the Montara field off Australia’s north coast in August 2009.

Negotiators from Indonesia and PTTEP Australasia met for the first time Tuesday in Perth. The two parties have not yet scheduled meetings.

The team will ask the National Aeronautic and Aviation Agency (LAPAN) to perform modelling on the areas affected by the spill before proposing a final amount for compensation, Masnellyarti said.

“We will collect supporting data from the Maritime Affairs and Fisheries Ministry, which previously reported a level of polycyclic aromatic hydrocarbons [PAH] that exceeded marine water quality standards,” she added.

Samples collected by the Ministry of Energy and Mineral Resources indicate that the hydrocarbons now found in the Timor Sea were similar to samples taken from the Montara platform, she added.

The Environment Ministry said its analysis showed the quality of sea water in Timor Sea failed to meet tolerable levels set by Indonesian government.

The ministry sampled sea water in five different areas.

It said that the total suspended density (TSS) of particulate matter in the samples was at 147 milligram per liter (mg/l), far higher than the tolerable level of 20 mg/l.

The East Nusa Tenggara environmental agency also found physical and chemical contamination from the oil spill that exceeded the tolerable level set by the Indonesian government.

The Montara field was developed by the Norwegian and Bermudan-owned Seadrill company and operated by PTTEP Australasia, a unit of PTT, the Thai state-owned oil and gas company.

The company’s oil platform exploded spilled more than 500,000 liters of crude oil into the Timor Sea.

Thirty-eight percent of Indonesia’s sea territory in the Timor Sea was affected by the spill, local fishermen’s catches dropped and thousands of tons of dead shallow water fish and whales were discovered.

The spill also destroyed seaweed farms cultivated by coastal communities in East Nusa Tenggara.

Transportation Minister Freddy Numberi, who is the head of the National Team for Ocean Oil Spill Emergency Situations, previously said the government asked PTTEP Australasia to pay US$5 million in initial compensation to repair environmental damage from the spill.

The initial payment will cover the short-term impacts of the spill, such as losses suffered by fishermen and seaweed farmers in the area, and is estimated to exceed Rp 247 billion, he said

“That was the figure when the oil spill area was still around 56,000 sqm. Now that the area extends over 66,000 sqm. We must recalculate the figure,” he said.

The East Nusa Tenggara provincial administration estimated damage from the oil spill in the short term could reach Rp 806.17 billion.


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Friday, July 16, 2010

Indonesia and Australia Join Forces for Montara Oil Spill

Jakarta Globe, July 16, 2010



The aftermath of the West Atlas rig explosion, seen in this file photo, and the massive oil spill that came as a result is being assessed by ministers from Indonesia and Australia. (AP Photo/PTTEP Australasia)


The Indonesian and Australian governments have decided to take action on the oil pollution in the Timor waters off Indonesia resulting from the Montara oil field explosion in August 2009, a minister said on Thursday.

“The fact is that both the Indonesian and Australian governments are in the same position and concerned that the oils spill have affected the environment,” said Foreign Minister Marty Natalegawa.

Both countries have conducted environmental research on the matter, he said in a joint press conference after meeting his Australian counterpart Stephen Smith at his office.

Marty said that both governments hold PTT Exploration and Production (PTTEP) Australasia responsible.

A special meeting led by the Indonesian Transportation Minister was held to establish a team to mediate with PTTEP.

“All we have to do is to develop a synergy with the Australian government in strengthening our efforts,” Marty said.

The Australian Foreign and Trade Minister, Stephen Smith, said that Australian Minister of Resources and Energy and Minister for Tourism Martin Ferguson made an inquiry of the causes and asked for an assessment from the Indonesian government.

Antara

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Friday, July 9, 2010

Pertamina Says Oil Spill All Mopped Up as Police Probe Negligence Angle

Jakarta Globe, July 09, 2010, Candra Malik,Arientha Primanita& Fidelis E Satriastanti

State oil and gas company Pertamina has succeeded in siphoning almost all of the crude oil that spilled into a river in Blora, Central Java, following a leak at its local fuel depot, an executive said on Thursday.

The leak, which police say might have been caused by negligence on the part of an officer on duty at the depot, on Wednesday sent thousands of liters of crude into the nearby Ledok River, covering it for kilometers in a thick layer of oil.

Fires, the causes of which were not yet known, also broke out on the surface, but the main blazes have already been extinguished, officials say.

Basuki Trikora Putra, Pertamina vice president of corporate communications, confirmed the oil spill and said that the company had carried out the necessary cleanup actions.

“We’ve managed to extract almost 95 percent of the spilled oil using a pump,” Basuki said.

“There were fires [at the site] for a while but we’ve managed to douse most of them.

“We’ll conduct an audit to see whether there are any external and internal causes for the accident, besides technical issues,” he said, adding the company had not yet calculated its losses.

On Thursday, some areas of the river still spewed thick smoke, a local policeman said, but the smoke did not prevent several residents from nearby settlements from trying to scoop the oil from the surface for use at home.

Some residents told reporters there that they planned to use the oil as fuel for cooking.

Blora Police Chief Adj. Comr. Isnaini Ujiarto told the Jakarta Globe that police were helping Pertamina officials from the depot to “localize this incident.”

“Fortunately, the depot is in the middle of a teak forest, far from any settlement, so to date there have been no reports of casualties,” Isnaini said.

Pertamina has contained the spill on the surface of the river and used oil pumps to siphon the crude into tankers, he said.

He added that an inspection of the storage facilities in the depot showed that although the fuel tanks were old and rusted, dating back to the Dutch colonial era, there was no sign of a leak.

Police, he said, suspect negligence on the part of an employee at the depot, who might have forgotten to close down a valve on time, causing the crude oil to flow into the river.

Police are questioning workers at the depot but have yet to name a suspect, he said.

As a precaution, police have closed access to the river from the three villages closest to the location of the spill — Ledok, Gagahan and Pojok Watu — to prevent people from scooping up the fuel, Isnaini said.

Berry Nahdian Furqon, executive director of the Indonesian Forum for the Environment (Walhi), urged the directors of Pertamina to evaluate their management and technology, pointing out that similar accidents had hit the company in the past.

“This is not the first time that there’s been a leak, so there should be a thorough investigation of the officials, and the directors of Pertamina should take full responsibility,” Berry said, adding that the incident showed how safety issues in the oil and gas industry were often ignored.

Pertamina should also be responsible for all costs stemming from the incident, including cleaning up the river, repairing other environmental damage and compensating villagers affected by the oil spill, he said.

Under the 2009 Environmental Protection and Management Law, heavy penalties can be imposed on corporations or institutions found to have caused environmental pollution.

Imam Hendargo, a senior official at the State Ministry for the Environment, said a team from the district environmental office had been dispatched to the site to investigate the leak and assess the damage.


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Thursday, June 24, 2010

Timor Sea oil spill forcing NTT fishermen to migrate

Antara News, Thursday, June 24, 2010 03:33 WIB

Kupang (ANTARA News) - Thousands of fishermen in Kupang`s Oesapa area are preparing to migrate to Bangka Belitung in Sumatra to find a new livelihood, a fishermen spokeman said.

They will migrate because their fish catches from the Timor Sea have declined drastically since the waters were polluted by an oil spill originating in Australian territory.

"Since the Timor Sea was polluted by an oil spill from a blowout in the Montara oil field on August 21, 2009, local fishermen`s fish catches have dwindled drastically. Now they are thinking of migrating to Bangka Belitung to build a new life," H Mustafa, chairman of the East Nusatenggara (NTT)`s Timor Sea Traditional Fishermen`s Alliance (Antralamor), told the press here Wednesday.

Some 3,500 fishermen grouped in Antralamor whose livelihoods had traditionally depended on fish from the Timor Sea had been affected by the oil spill following an explosion at an oil rig of PTTEP Australasia in the Montara oil field in the West Atlas Block in the Timor Sea, he said.

The fishermen had also pulled back most of the fish traps they had set in the sea along the Kupang coast because the contraptions no longer yielded the usual quantities of fish.

Meanwhile, an edible fat and oil biochemist at Nusa Cendana University (Undana), Dr Felix Rebhung, said the apparent pollution of the Timor Sea had forced deep sea fish in the waters to migrate to other waters.

"Deep-sea fishes are very sensitive to the conditions of their environment. If their environment or habitat is damaged or polluted, they will leave, and try to find a more friendly environment," he said."So, the fishermen`s complaint about minimal fish catches is quite logical," he added.

Rebhung who teaches at Undana`s faculty of agriculture said if a sea was contaminated by oil, oil condensate or lead, it would take many years for its ecology to return to normal.

Ferdi Tanoni, a local observer of Timor Sea affairs, said President Susilo Bambang Yudhoyono should address the Timor Sea pollution problem with the same care and firmness as US President Barack Obama had shown toward the Gulf of Mexico oil spill from a British Petroleum (BP) rig.

"If Barack Obama demanded 20 billion US dollars in damages from BP, the operator of the Monatara oil field should pay about 15 billion US dollars to compensate the losses of fishermen in the western part of East Nusatenggara and the islands of Rote, Sabu and Sumba," he said.

Tanoni also urged the Australian government led by Prime Minister Kevin Rudd to disclose as soon as possible the results of its investigation into the Montara oil spill disaster.

The oil spill had caused thousands of fishermen and seeweed breeders in the western part of NTT to lose their source of living, making it "a humanitarian tragedy of huge proportions," Tanoni said.


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Monday, June 21, 2010

Eight Cilacap fishermen missing in Indian Ocean

Antara News, Monday, June 21, 2010 15:39 WIB

Cilacap, C Java (ANTARA News) - Eight fishermen from Cilacap, Central Java, have remained missing after their boats capsized in the Indian Oceen at 2 on Friday morning.

"The fishermen were catching fish from two motor boats - the Bali Indah-15 and Putra Jaya-1 - when they were engulfed by big waves," spokesman of the Tanjung Intan Port administration;s sea and ciasr guard unit, Aher Priyatno, said here on Monday.

He said the two ill-fated boats capsized in waters near Cemiring Tengah at the coordinates of 9.40 degrees southern latitude and 109.16 degrees eastern longitude.

After the accident, 5 members of the Bali Indah-15 crew were rescued but five others could not be found.

Of the Putra Jaya-1 crew 8 members were rescued and three others went missing.
"We still don`t know the identities of the eight missing fishermen but rescue teams continue to search for them," Aher Priyatno said.

On a separate occasion, local National Search and Rescue Agency (Basarnas) coordinator Waluyo said his party found it difficult to search for the victims because the location where the accident occurred was far away or about 72 miles from the Cilacap coastline.

Basarnas is an independent agency with national responsibility for conducting search and rescue operations where needed throughout Indonesia.

Sunday, June 20, 2010

BP agrees to $20 billion fund for spill costs

CNN Money, by Ben Rooney, staff reporterJune 16, 2010: 3:46 PM ET

President Obama meeting with BP executives Wednesday.

NEW YORK (CNNMoney.com) -- BP has agreed to put $20 billion into an independently managed account to cover economic damages related to the oil spill in the Gulf of Mexico, President Obama said Wednesday.

Obama announced the agreement after meeting with BP executives at the White House. Chief executive Tony Hayward and chairman Carl-Henric Svanberg, were among the execs there to discuss the spill, which has become the worst environmental disaster in US history.

But the fund will not limit the amount BP is responsible to pay, and it will not block states or individuals from pursuing claims in court, the president said.

Kenneth Feinberg, an attorney who served as Special Master of the 9/11 victims compensation fund, will oversee the fund, which will not be controlled by the government or BP.

Obama said he is "absolutely confident" that BP will be able to meet its obligations and that the agreement "sets up a legal and financial frame work for them to do it."

The fund, he said, "will provide substantial assurance that the claims people and businesses have will be honored."

BP (BP) has said repeatedly that it plans to pay all costs related to the spill. But the company has been criticized for not moving fast enough to process claims of economic damage filed by Gulf businesses impacted by the disaster.

Vast: A ship deploying an oil float shows the scale of the disaster as the spillage spreads for miles around

Carl-Henric Svanberg, the chairman of BP, said after the meeting that the company will not make any dividend payments for the remainder of the year.

BP had been under intense political pressure to suspend its dividend, which totaled $10.5 billion last year, before the costs of the spill were known.

In addition, BP agreed to set aside $100 million to compensate oil workers idled by the government-imposed moratorium on deepwater drilling in the Gulf of Mexico.

Svanberg reiterated that the company will "live up to all our legitimate responsibilities," adding that the deal "should assure the American people that we mean what we say."

He also took the opportunity to apologize on behalf of the company and its employees.

Obama said the liabilities BP faces are "significant." But he called the company "strong" and "viable," adding that nation has an interest in keeping it above water.

While the new framework is an important step in repairing the economic and environmental damage in the Gulf, Obama acknowledged that "we're not going to turn things around overnight."

Under the terms of the agreement, BP will make installments of $5 billion a year for four years, including $5 billion in 2010, according to a White House fact sheet. BP will provide "assurance" for these commitments by setting aside $20 billion in U.S. assets.

As of March, BP had about $7 billion in cash on hand, according to its quarterly financial statement. The company generates over $7 billion in cash each quarter, or about $30 billion per year.

In addition, analysts estimate that BP could comfortably borrow up to $17 billion on relatively short notice.

BP said last week that it has so far spent over $1 billion on containment, clean up and other costs related to the spill.

Analysts say it's too soon to say how much the spill could end up costing BP, but estimates have ranged between $11 billion and $60 billion on the low end, to upwards of $100 billion in the worst case.

Much depends on the amount of oil flowing from the well and whether BP is found guilty of gross negligence.

Reports from congressional committees and in the press have indicated BP chose cheaper, riskier drilling tactics in the lead-up to the disaster.


Meanwhile, government scientists on Tuesday increased their estimate of oil flowing into the Gulf by 50% to between 35,000 and 60,000 barrels per day. That translates into 1.5 million gallons to 2.5 million gallons per day.

Wednesday was the 58th day that oil has been spewing into the Gulf of Mexico.

Documents released by a Senate committee Wednesday show that BP has already given some money to the government for spill-related costs.

BP transferred about $71 million in two separate transactions last week to the Coast Guard for clean up costs, according to the documents.

-- CNN's John King, Suzanne Malveaux and Evan Glass contributed to this report.


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