INDONESIA: Mud from oil well mucks up Indonesian towns

Thousands of Indonesians driven from their homes by rivers of noxious mud linked to exploratory oil drilling may now be forced to abandon their only means of livelihood: shrimp farming.

In a case highlighting the country's checkered environmental record exploiting resources, authorities have struggled for weeks to plug the mud flowing from cracks in the ground in East Java.

The incident is the latest in a series of environmental traumas linked to energy and mining companies operating in the resource-rich country, which has been criticized for haphazard enforcement of operating guidelines.

The torrent has inundated swathes of land in four villages and fouled many shrimp ponds dotting coastal Sidoarjo regency.

"Villagers who are interested are being taught how to make bricks," Syaiful Illah, the vice-head regent of Sidoarjo, near the city of Surabaya, told Reuters. "We are discussing the possibility of changing the places inundated by mud into an industrial center for bricks and roof-tiles."

For years, the coastal town of Sidoarjo has been known for shrimp farms.

But now some 8,000 people have been forced out of their homes by the mud, which has blocked roads and triggered cases of breathlessness and vomiting among hundreds of people.

An oil industry watchdog official has said the mud flow that began at the end of May could have been triggered by a crack at about 6,000 feet in the Banjar Panji-1 exploration well, which is operated by Indonesia's Lapindo Brantas. It has a 50-percent share in the well.

Australia's Santos Ltd. has an 18-percent interest, while Indonesia's largest listed energy firm, PT Medco Energi International Tbk, holds the remaining 32 percent.

Media reports said Australian firm Century Resources was rushing in large drilling equipment and 130 people to the site to stop the flow of mud, which police say has a high fluoride content and is laced with sulfur.

A Lapindo spokeswoman said the company had appointed an expert from Texas and a local firm called Abel Disaster to find the source of the mud flow.

The case provides ammunition to critics of what they say is Indonesia's lax regulation of companies that make their profits from Indonesia's metal, energy and forestry resources.

However, analysts say environmental concerns are unlikely to have a major impact on much-needed foreign investment in Indonesia, Southeast Asia's biggest economy,

"The factors that kept them away are bureaucracy, lengthy periods in obtaining permits and huge taxes," said Kurtubi, an analyst at the Center for Petroleum and Energy Economics Studies.

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