Thousands of Indonesian mudflow victims protest

SURABAYA, Indonesia, Nov 27 (Reuters) - Thousands of Indonesians blocked a key road on Java island with truckloads of sand on Monday to press the operator of an exploratory oil well spewing torrents of mud to pay more compensation.

Some 10,000 people have been displaced and entire villages inundated by the mud that has flowed since a drilling accident in May, causing an unfolding environmental disaster in the Sidoarjo area, near Indonesia's second largest city of Surabaya.

"We are here to claim our rights as Indonesian citizens. A few days ago, we not only lost our houses but also our paddy fields and all the infrastructure because of Lapindo," Muhammad Kudori, a representative for the protesters, said after meeting top local officials and the head of the operator of the oil well.

The Banjar Panji well was operated by Indonesia's Lapindo Brantas, a unit of PT Energi Mega Persada , partly owned by the Bakrie Group, which is controlled by the family of Indonesia's chief social welfare minister Aburizal Bakrie.

The firm has denied the mud flow is directly linked to the drilling operation.

So far the company has offered a monthly stipend of 300,000 rupiah ($32.86) to villagers who have lost their houses and rent for new accommodation. It has also set aside 6.9 billion rupiah to cover agricultural losses over the next few years.

Anger has been mounting in the area with the hot mud gushing at a rate of 50,000 cubic metres (1.75 million cubic feet) a day from the well despite several government contingency plans to plug the leak.

Many of the protesters who gathered outside the Sidoarjo regent's office had lost their homes and fields in the past week because of the mudflow, which was also blamed for a gas pipeline explosion in the area last Wednesday that killed 11 people.

"I agree with your demand on the compensation of houses and buildings," Basuki Hadimulyo, managing head of a national task force formed by the government to tackle the mudflow, said.

"I will fight for your rights in Jakarta."

In the middle of negotiations, the representatives of the victims walked out as national team could not guarantee the compensation they demanded.

The protesters blocked a road connecting Surabaya with northern cities of East Java with three trucks of sand.

Several experts have said the mudflow could have been triggered by a crack about 6,000 feet (1,800 metres) deep inside the well.