Around 726 houses, 17 school buildings and 15 factories in the vicinity of the PT Lapindo Brantas operated Banjar Panji-1 exploration well, in which Australian oil and gas major Santos holds an 18% stake, have now been affected by the mudflow, according to Indonesian news agency Antara.

A total of 195 people have also been hospitalised, suffering a range of symptoms including diarrhoea, respiratory problems and vomiting. More than 5000 villagers have had to be relocated, a nearby toll road has closed and the main train line to the region is being threatened.

Lapindo Brantas has begun to compensate the thousands of people so far affected by the mud, with villagers reportedly receiving $US30 a month, while almost 2000 workers from the now-defunct factories enveloped by the mud have been offered $70 a month.

The village of Sidoarjo was previously known for its shrimp industries, including the production of shrimp crackers, however, mud has now spoiled crops in tens of hectares of agricultural fields, and killed fish and shrimp in local farmers’ fish ponds.

With the mud continuing to flow since the initial “well control incident” on May 27 – it now covers around 130 hectares to a depth of 4m – the push is now on to find the source of the flow and case the drill hole. However, reports have suggested this may take up to three months.

Meanwhile, a Financial Times report on the catastrophe has suggested the sluggish response to the disaster is a result of an Indonesian Government link to the operator of the well.

The Bakrie Group owns a majority stake in the Banjar Panji-1 exploration well through subsidiary and operator of the well Lapindo Brantas.

According to the report, the Bakrie Group, a family-owned conglomerate with links to industries as disparate as coal mining and telecommunications, is headed by Indonesia’s chief welfare minister Aburizal Bakrie.

The report said an Indonesian economist referred to Bakrie as a “major player” in that country. The Bakrie Group is also reported to have “strong links” to the drilling contractor involved in the incident.

The Financial Times also reported a leaked letter from PT Medco E&P Brantas – a partner with a 32% stake in the well project – that alleges “gross negligence” on behalf of Lapindo Brantas and the drilling contractor for “failing to install a preventative casing deeply enough”.

Medco said the result of this was, when problems occurred, the walls of the well could not withstand the pressure.