Thousands displaced by noxious mud in Indonesia

SIDOARJO, Indonesia, July 8 (Reuters) Noxious mud oozing from around an oil well since late May has driven about 8,000 people from their homes in Indonesia's East Java province and left hundreds gasping for breath or vomiting, according to local officials.

''Factories, houses, fields, freeways have been drowned by the mud which is spread over more then 200 ha (494 acres),'' Win Hendrarso, head of Sidoarjo regency, an area near the city of Surabaya where the well is located, told reporters late on Thursday.

In addition to forcing people out of their homes, the thick black sludge giving off sulphurous fumes has left hundreds of people complaining of breathlessness and vomiting, said one hospital official.

''Until this day, we are still taking care of hospitalised patients. Most of them suffer from respiratory obstruction,'' said Amir Basuki, another hospital official in Surabaya.

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

Authorities have been struggling to plug the mud flow that emerged from cracks in the ground around the Banjar Panji-1 exploration well, which is operated by Indonesia's Lapindo Brantas, which has a 50 percent share.

Lapindo is a subsidiary of PT Energi Mega Persada, partly owned by the Bakrie Group, controlled by the family of Indonesia's chief social welfare minister, Aburizal Bakrie.

Australia's Santos Ltd., which said last week it was insured against the problem, also has an 18 percent interest.

Indonesia's largest listed energy firm, PT Medco Energi International Tbk, holds the remaining 32 percent.

An oil industry watchdog official said a government team was investigating the incident, noting that the mud flow that began at the end of May could have been triggered by a crack in the oil well at a depth of around 1,800 metres.

Imam Agustino, general manager of Lapindo Brantas, said previously the firm planned to inject heavy mud and cement into the existing well or into a new well in a bid to stop the flow.

Media reports said the company had brought in outside experts to help plug the flow of mud, which has a high fluoride content and is laced with sulphur, but there was no clear timetable.

Nirwan D. Bakrie, the chief executive of Lapindo, was quoted by the Antara news agency as saying the firm would take responsibility and follow the direction of the environment ministry. Officials at the company could not immediately be contacted.

Hundreds of people have been forced to shelter in a market place building after the 1.6 metre thick swathe of mud entered their homes, with many forced to wade through sludge to try to rescue household belongings.

Local government officials said they were trying to channel the mud into the sea to help ease the problem that has affected four villages.

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