Lapindo Brantas - Environment

Lumpur Sidoarjo

The LUSI Report

This report outlines the financial commitment of the Bakrie family to provide assistance to the residents of Sidoarjo impacted by the 2006 Lumpur Sidoarjo (Lusi) mud-flow including emergency and containment activities designed to reduce the impact of this disaster.

This financial commitment, without obligation, was revised a number of times and was officiated through a Presidential Decree which covered an area of approximately 700 hectares and included more than 40,000 residents.

Lapindo Brantas Inc. an oil and gas exploration company was a joint venture between PT. Energi Mega Persada Tbk. (50%), PT. Medco Energi Tbk. (32%) and Santos Australia (18%), where the Bakrie family, through its investments, held a controlling stake in PT. Energi Mega Persada Tbk. On May 29th 2006, a series of mud eruptions occurred, with the closest being 200 metres from an exploration site operated by the company.

After an investigation, it was determined that no correlation could be proven between the drilling activities and the mud eruption and that the drilling operations had followed Government regulations and agreed operational procedures as determined by the partners.

Lapindo Brantas Inc. geological experts believe the mud eruption was linked to seismic activity surrounding an earthquake two days earlier, which was also linked to the reactivation of Mt. Semeru 300km from the earthquake’s epicenter in Yogyakarta. Over the past 5 years, the global scientific community has debated a number of hypotheses over the causes of the eruption but has failed to reach a unanimous conclusion. Regardless of the uncertainty and polarized views surrounding the cause, the Bakrie family maintains its commitment in providing financial assistance to the victims as agreed and officiated within the Presidential Decree.

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