Santos, the operator of the Kutubu oil fields says it is reviewing a direction by the PNG lead environment regulator to pay millions of kina to Kutubu landowners for damages to two river streams.
Santos maintains that allegations of damage to springs at Kutubu were dismissed by the PNG National Court in 2016
Conservation and Environment Protection Authority (CEPA) Managing Director Mr. Jude Tukuliya issued had issued last month a 90 days direction for Santos to pay K50 million kina a compensation to clans of Lake Kutubu, Southern Highlands, for damage to the environment.
Tukuliya, said it was a “compensation claim for environmental damage to the Yakerabo and Gese springs, Lake Lutubuf pursuant to Section 87 (7) of the Environment Act 2000″.
Tukuliya said explained that the environmental damage claim dated back to 2005.
He said by May 23, 2023, the CEPA delivered a letter to Oil Search PNG Limited (now Santos) advising that Oil Search PNG Limited would begin negotiation with the landowner legal counsel on the compensation amount of K50 million and reach an agreement within 90 days as required by Section 87 (6) of the Environment Act.
CEPA made the following determinations:
• AFTER many years of the Kutubu Oil Project operated by Oil Search Limited then and now Santos as new operator and permit holder, legally assumes all ‘responsibility and take carriage of all liabilities of the previous operator;
- IT is Cepa’s view that the incident on loss on circulation of chemicals used for drilling at Kutubu 2X, occurred due to operational drilling problems during that particular time of drilling and professional negligence by the permit holder;
- THE permit holder also failed to report the incident to the Director of Environment within 24 hours which would be the standard required mandatory time frame under the permit conditions;
- THE action by the permit holder in failing to report the incident to the director of environment constitutes non-compliance;
- OIL Search PNG Limited, a subsidiary of Santos Limited, was also given the opportunity to take up discussions with the complainant’s legal counsel to reach an agreement within 90 days but this negotiation never eventuated; and,
- THE K50 million must be paid within 90 days as of the date of receipt of this letter.
However, Santos in an email to PNG Economics Bulletin said: Santos is currently reviewing the CEPA direction. The allegations of damage to springs at Kutubu were dismissed by the National Court in 2016.”
CEPA is expected to react when Santos makes its full position known within the 90 days.