jimbabwe Vzglad: Delovaya gazeta
Zamira Kosmurzieva
Uralsk, Kazakhstan
January 22, 2010
http://www.respublika-kz.info/files/news/issue/0/69.pdf
In its ten years operating in Western Kazakhstan Oblast, the consortium Karachaganak Petroleum Operating B.V. (KPO B.V.) has spent more than $135 million on social projects. With funding from the Soros Foundation-Kazakhstan, the public association Zhasil Dala conducted a six-month study entitled “The Effectiveness of KPO B.V.’s Investments in Social Projects Undertaken in the Village of Berezovka”. This population point is located five kilometers from the field.
“When we tried to clarify from customers and contractors the sums that were spent on social projects, we encountered powerful resistance from state bodies and representatives from KPO B.V.,” recounts the leader of Zhasil Dala, Svetlana Anosova. “They all referred to the construction documents, but it is not possible to obtain these documents. Construction documents are Karachaganak’s oddest secret yet!”
As a result of her research, Anosova has concluded that the funding is spent ineffectively. Zhairolla Beketov, the head of the Construction Department of the Burklinsky Raion Akimat (translator’s note: Mayor’s Office), once enumerated the reasons: “The lack of interest on the part of customers/investors, the lack of control over expenditures allocated for social projects in agreement with the Final Production Sharing Agreement, and the lack of contractors qualified to undertake the necessary jobs.” This was the bureaucrat’s answer to the village representative as to why the problems with the water supply system were not resolved after it was renovated.
There is money, and yet there isn’t money
Two pumps with expensive modern equipment were installed in the village of Berezovka, for a total of 57 million tenge. However, water can only be withdrawn from one of the wells at a rate of 0.9 liters/second, and the second well stands completely dry. According to the Berezovka villagers, they warned those installing the wells that water exploration had been conducted at these locations in the past and come up dry, but the contractor did not listen to them.
As a result, four water towers serve the village, but there is, as before, not enough water for the population. Moreover, analysis reveals that the water does not meet drinking water standards.
“Yes, it is tainted,” the Berezovka villagers express with indignation, “in its appearance and in its taste, it is obvious that it should not be consumed.”
Today those residents of the village who have cars, pick up five-liter bottles of water in Aksai to ensure water for their families and neighbors.
The 2007 renovation to the Berezovka House of Culture is another example of the wasted use of social project funds. The residents of the village could not tell much of a difference following the renovations: the roof continues to leak, the décor suspended from the ceiling is falling apart, the fiberboard floors are swollen and, when cleaned, peel off like paper. To the villagers’ questions of how much was spent on the House of Culture renovations, KPO B.V. answered 262 million tenge. This astronomical figure greatly surprised the villagers, as it would have been possible to build an entirely new House of Culture for this sum. A letter of clarification was then sent by KPO B.V., saying that the figure was mistaken and that 23 million tenge had been spent in total. However, a third sum—70 million tenge—has been cited by the Raion Maslikhat (translator’s note: regional legislature). To this day, no one knows which of these versions represents the truth.
And in the Children’s Village, also constructed in Berezovka with social project funds, the first cracks have already appeared in the building’s foundation.
We are not required to keep track!
The members of Zhasil Dala visited the population points surrounding the field. In the villages of Uspenovka and Zhanatalap, social project funding was used to construct a medium pressure gas pipeline; however the villagers do not have the basic resources necessary to bring the gas to their homes. Sixty-nine percent of the population of the Uspenovka uses the blue fuel, and in Zhanatalap only half of the population does so. In the village of Bestau, they did not learn of any social projects. The villagers collect water from a single well; transportation to the district center runs two or three times a week, therefore the village’s working residents have to walk six kilometers to the highway, and then attempt to get to work. Last year, one of the residents died from a heart attack on the way home. Another woman described how her oldest son is in the hospital—the sole breadwinner in a large family. They are in need of money for his treatment, and the mother is prepared to sell their last cow, but they cannot find a buyer.
“The people to whom the land and its rich resources belong, according to the Constitution, are experiencing hopelessness and despair,” concluded Svetlana Anosova, following her research. “According to the current price of oil, for each person living in our oblast, $35,000 worth of oil is extracted. We need strict control over the allocation of funds; however it doesn’t seem likely that we will attain this control in reality. To all of our questions, KPO B.V. either has not answered at all or has sent answers that aren’t really answers. As the Manager for Social Projects, Zhanibek Galiev, and the Head Public Relations Manager, Trina Fey, explained, according to the Final Production Sharing Agreement, the company is not obliged to present information on the financial aspects of the projects.”
In November of last year, Svetlana Anosova conducted two roundtable discussions for the purpose of creating a public control board for the use of investments by oil and gas extraction companies. In both instances, she invited the leaders of the oblast and KPO B.V., but these and other events were ignored.
References
Karachaganak is one of the largest fields in Kazakhstan, with a total investment of $5.5 billion. The development of the field is being conducted under the leadership of four international corporations: BG Group (UK) and ENI (Italy), both of whom have a 32.5% stake in the project, as well as Chevron (US) with a 20% stake, and Lukoil (Russia) with 15%. In order to implement the Karachaganak project, these companies formed the consortium “Karachaganak Petroleum Operating B.V.” (KPO B.V.). The companies operate in accordance with the Final Production Sharing Agreement signed in 1997, and they will manage the Karachaganak project until 2038.
Translation by Crude Accountability