Thailand’s national upstream company PTTEP has reached an out-of-court settlement with Indonesian seaweed farmers, agreeing to pay US$129 million in compensation for the oil spill that followed the 2009 Montara blowout offshore Australia.

The oil spill and subsequent slick occurred when the Montara wellhead platform, located in the Timor Sea in Australian territorial waters, had a blowout on 21 August 2009.

The leak off the northern coast of Western Australia could only be plugged on 3 November that year, resulting in one of Australia’s worst oil spill disasters.

Some 13,000 Indonesian seaweed farmers in 2019 filed a class-action lawsuit against subsidiary PTTEP Australasia (PTTEPA) demanding A$200 million (US$132.3 million) in compensation, claiming the oil had damaged the crops and impacted their livelihoods.

“Our experts contend that approximately 6000 barrels per day of oil contaminated the sea,” said Ben Slade of Maurice Blackburn, the law firm that represented the seaweed farmers at the initial hearing.

PTTEPA initially claimed that the oil leaked from Montara never reached Indonesian waters, but it subsequently conceded that contamination of this kind was inflicted.

An Australian court ruled in favour of the Indonesian plaintiffs in hearings on 19 March and 25 October last year.

PTTEPA Ashmore (PTTEPAA) on 13 December 2021 appealed against the verdicts, prompting the Federal Court of Australia to urge both parties to settle their differences in out of court negotiations, in line with Australian judicial practice for class action cases.

During mediation, the then Montara operator reached a preliminary agreement with the group of Indonesian seaweed farmers to would pay A$192.5 million, in full and final settlement of the class action, but with no admission of liability under the settlement.

Guilty plea

In 2012, the PTTEPA subsidiary paid fines totalling A$510,000 handed down by the Darwin Magistrates Court for its responsibility in the 2009 Montara incident.

The company had pleaded guilty to four charges, laid by Australia’s offshore regulator, the National Offshore Petroleum Safety and Environmental Management Authority (Nopsema).

PTTEPAA’s then-chief executive Ken Fitzpatrick at the time said the company had taken “a co-operative approach” in pleading guilty to all charges to accept accountability for the mistakes which were made.

“Mistakes were made that should never be repeated. The conclusion of the court proceedings draws a line under the Montara incident, allowing the company to focus on producing safe and clean operations now and into the future.”

Montara today is operated by Singapore-headquartered independent Jadestone Energy, after it bought the by-then producing oilfield asset from PTTEP in 2018.

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