INDONESIAN INSURERS BEGIN LAPINDO BRANTAS GAS FIELD PAYOUTS
A consortium of Indonesian insurers led by Tugu Pratama Indonesia has begun paying out claims relating to the recent Lapindo Brantas gas field disaster in Sidoarjo, East Java, caused by the eruption of a volcano. Tugu president Syahrir Hamzah said that the company would pay $9.6m of its total cover of $15m before the end of the year. He noted that a claim of $4.7m had been paid on November 8, with a further $4.9m being paid around mid-December. Tugu is controlled by state-owned oil and gas company Pertamina, and underwrites 42.5% of the Lapndo field. Jasa Indonesia has 37.5% of the liability, with the remainder of the liability being held by members including Panin Insurance, Astra Buana and Wahana Tata. AIU Indonesia is understood to have a contract covering third-party liabilities. Lapindo recently told Australia-based Santos, which owns 18% of the gas field, that the cost of containing and stopping the mud could be up to 80% higher than previous estimates of $180m. This did not include possible compensation claims from victims of the mudflow, which covered 400 hectares of industrial land, farmland and residential areas.
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