Karachaganak Kazakhstan recent news

Business is Secure while Oil Flows Beneath

Natalia Smirnova
Uralsk Weekly
October 27, 2004

The Uralsk Weekly has written several times about the problems facing the residents of the village of Berezovka, who have become the guarantors of the interests of the international corporations developing the Karachaganak oil and gas condensate field, and our own government that is handing the field over to them. The international environmental nongovernmental organization (INGO) Crude Accountability has taken a stand on behalf of the villagers by writing a letter to the International Finance Corporation (IFC), a member of the World Bank Group, which provided the company LUKoil with a loan of $150 million in order to develop the field.

One of the principles of the IFC, and a condition for providing the loan, is the environmental and social sustainability of projects, and honesty, transparency and equality in work with the local communities.


According to Crude Accountability, the Karachaganak project is violating existing standards and principles on a number of levels. Associated gas is flaring from stacks and on the ground. Toxic emissions in the atmosphere are causing health problems not only in Kazakhstani villages, but also are impacting the Russian village of Ilyek, and polluting the Ural River, which is a spawning ground for sturgeon.

According to the villagers, during the past year, the quality of drinking water has dramatically decreased, but there is no information about ground water pollution. Forty-five percent of the village population suffers from a variety of chronic ailments. Berezovka residents live in constant fear of a possible accident at the field. A mobile air monitoring laboratory is located at the northern edge of the village, but in the event of excessive toxic emissions, the poisonous gases would reach the village before it would be possible to evacuate. Plus, according to the company’s emergency response manager, there is no evacuation plan. Representatives of the international NGO counted only 100 gas masks (circa 1979) in the local school, despite the fact that each of the 1300 villagers should be equipped with a gas mask. The environmental impact assessment of the Karachaganak project states that the company is prepared to deal with an accident of up to 30 thousand tons and is also able to manage an oil spill of 8 thousand tons. In the event of larger spill, the oil could spill into the Berezovka River, which flows into the Ural River.

When Crude Accountability staff asked KPO (Karachaganak Petroleum Operating B.V.) to show them the border of the field and the new sanitary protection zone (SPZ), the company employees answered that those borders were difficult to determine. How is it possible that the SPZ is not determined on the site? And how can local residents expect their rights to be protected if the location of their village is not determined exactly on the map of the field or that information is not accessible to them? The executive director of the environmental organization is surprised. Naive foreigners! What respect and rights can we talk about if the local government has created an alliance that provides absolute freedom to destroy nature, exempt even from paying environmental fines, and the native Ministry of Health decreased the SPZ–it seems especially for Berezovka–from five kilometers to three, therefore removing the village from its borders! Over a year ago, Berezovka residents approached officials at KPO (formerly KIO) with a petition, in which they described the strange environmental changes occurring throughout their region: the number of birds had dropped dramatically, there were practically no more frogs and squirrels, after rain the trees suffered, harvest took on strange shapes, domestic animals were dying suddenly, and the occurrence of stillborn animals was frequent. The results of the villagers’ research stunned medical experts: in the past three years, everyone–without exception–has shown signs of hair loss, tooth decay, bleeding gums and loss of vision and hearing. There has been an increase in oncological illnesses, especially among young women. Children suffer from skin ailments, nose bleeds, and aching bones. There have been instances of stillborn children. Berezovka villagers demanded relocation to a safe location, but…

Fires would burn at night on the field, writes S. Anosova from Berezovka. As a result, mornings begin with headaches, and at school, students suffer nosebleeds. The smells from the field are especially noticeable when the wind blows from the river, which is located in the lowlands and flows along the eastern edge of the village, drawing emissions that blow from the field.

In July of this year, Berezovka residents videotaped an enormous glow above the field, which continued for several days and was accompanied by loud booms and noises. The entire village was living in fear, thinking that an accident had occurred on the field. No explanation was given to the villagers, and Crude Accountability was unable to attain information about the situation from the company or local authorities. In an effort to obtain an explanation and complete information about the condition of the environment and the safety of the villagers, Crude Accountability wrote to the director of the Department for Oil, Gas, Mining and Chemicals at the IFC, which is financing the project. A copy of the letter was sent to the General Director of KPO, Paulo Campelli, the head of the Regional Environmental office, R. Suerbaev, and the Vice President of the Office of the Compliance Advisor/Ombudsman of the IFC, M. Taylor.

The editors of the Uralsk Weekly will publish their response upon receipt.

From the production sharing agreement of the Karachaganak Oil and Gas Condensate Field. Chapter on “Responsibility and Freedom from It”:

The Republic acknowledges and confirms that the Contractor will be free from payment or responsibility for paying all environmental fines, with the exclusion of those which are the result of gross negligence, unreasonable conduct or intentional abuse on the part of the Contractor, and the Republic agrees to adopt conditions (including allocation of any necessary guidelines or permission of any responsible organ) with the goal of providing to the Contractor all such types of freedom from responsibility. The Contractor does not carry any responsibility, and the Republic in reality protects the Contractor from responsibility and provides it with compensation in relationship to any environmental lawsuits.

The INGO Crude Accountability has been working for approximately two years, as an independent program to protect the Caspian Sea and its tributaries. Members of Crude Accountability work in the countries of Central Asia, providing support to independent environmental organizations.

Translation by Crude Accountability