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«Complaint Regarding the Lukoil Overseas Project (Karachaganak Oil and Gas Field) Burlinsky District, Western Kazakhstan Oblast, Kazakhstan April 15, ...»

-- [ Page 4 ] --

The CAO Team analyzed the following environmental, health, safety, and socioeconomic data for

the desk review:

• Project ESIA (March 2002);

• Crude Accountability website (www.crudeaccountability.org)

• Social Baseline Assessment Report (April 2004);

• Annual Monitoring Report for 2002 (January 2004);

• Resettlement Action Plan for Tungush (May 2003);

• IFC Project Team’s correspondence;

• Power Point Presentation to the CAO (November 2004); and

• Various independent health studies and reports on Kazakhstan conducted by international development and health organizations36.

Field Visit

Field consultations were based on individual interviews and focus group discussions with representatives of Berezovka’s community including women, men, and children of various age, education, occupation, health status, ethnicity and years of residence in the village. The interviews and discussions were conducted in Russian in a structured format. Field observations included: (i) site visits to Berezovka; (ii) areas of immediate proximity the KOGCF; (iii) site visits to Bestau, Dimitrovo, Priuralnii, and Karachaganak.

35 According to Project’s documents, there are eight villages in the proximity of the KPO Field SPZ zone and along the export pipeline that are considered to be directly and indirectly impacted – Berezovka, Zhanatalap, Bestau, Karachaganak, Dimitrovo, Priuralnii, Uspenovka, Zharsuat, and Karakemir. In addition, the village of Tungush has been resettled to the city of Uralsk as a result of a GoK decision.

36 See Appendix 2 for further details.

–  –  –

Pollution reduction and/or control measures:

1. Installation of a Super Green Burner (to reduce the amount of harmful pollutants emitted during flaring), addition of a fourth flash compressor at Unit 2 (to eliminate flash gas flaring), methanol regeneration at Unit 3, control-at-source technology upgrades at four stations within the field, to reduce emissions, new equipment/technologies with construction of Unit 2, KPC including GE turbines with low-NOX burners and gas recycling compressors that eliminate flaring, as well as modified well testing practices. The following actions were also taken: removal of 80,000 tons of drill cuttings, clean up of 37 drilling pits, and disposal of 28 abandoned rigs. In addition, KPO secured reduced flaring from well testing by approximately 75%, reduced flash gas flaring by approximately 75%, implementation of modern waste management techniques as well as continue re-greening and tree planting programs of scorched land (140 ha re-cultivated since 1998).

Monitoring:

2. KPO’s environmental monitoring includes: equipment of each plant with continual air monitoring devices set at 10 ppm (15 mg/m3) for H2S; fire and gas detection system in place (incl.

water, extinguishers and emergency plans); waste management (audited by special independent consultant); liquid and hazardous waste stored in concrete-lined polygons; waste segregation policy in place (waste-avoidance, reuse, recycling, recovery & disposal); domestic waste sent to an approved sanitary landfill; air, water and soil monitoring–186,000 data points generated each year;

ground and surface water analysis done through 25 monitoring wells within the field plus 12 wells in 12 villages, including Berezovka.

3. KPO has to apply for a Nature Use Permit with the Kazakhstan authorities to be able to emit a certain amount of various pollutants. The Permit is granted based on the planned activities, but stipulates that even in case of unplanned emissions (such as plant upsets); the project must not exceed the maximum allowed levels by Kazakh law. The ambient levels are monitored at three points: inside every plant (at source), inside the field, and in each village, four times a day (every six hours). According to IFC, the project does not exceed the planned levels, and comes below in most months because of the use of advanced process technology and well testing techniques.

Even with recent problems with facilities start-up (June, July and August 2004), the project has not exceeded permissible legal levels at measuring points, although the project exceeded the planned levels of emissions. However, the project reports and pays voluntary fines to the local environmental regulator (about US$9 million paid in 2004) for unplanned incidences where emission levels are exceeded. Compliance audits by the local authorities, Ministry of Environment, shareholders, IFC, and BMT Cordah are also carried out.

Compliance:

4. As a Category A project, certification by an independent third-party consultant is required.

Edinburgh-based BMT Cordah was hired to provide third-party oversight for this project. In 2001, during project appraisal, IFC found the proposed project to be designed in full compliance with WBG/IFC policies and guidelines. Following supervision visits in October 2003 and October 2004, the Environmental Monitoring Plan (EMP), occupational, health, safety and social aspects of the project, air emission data and waste analysis, as well as any changes to design, were reviewed; all project facilities and communities were also visited. Independent monitoring by IFC for 2003 affirmed compliance, and preliminary indications for 2004 are expected to indicate the same.

–  –  –

Late 1980s Tungush village asked for resettlement 22 January 1991 Executive Committee of the District Council of People’s Deputies endorsed proposal to relocate Tungush to the existing village of Kzyl-Tal 24 December 2002 Kazakhstan Ministry of Health decision to reduce SPZ to 1.5 km 27 December 2002 KPO submits SPZ Project Design for natural emission reduction efforts to Kazakhstan Ministry of Health and Environmental Protection including provision for an additional 1.5 km “no-encroachment” zone 24 January 2003 Kazakhstan Ministry of Health approved the SPZ Project Design, including “no-encroachment” zone

–  –  –

27-28 March 2003 Joint Operating Committee (KPO partners and KazMunaiGas) endorses KPO’s funding arrangement for resettlement 15 May 2003 Resettlement Action Plan approved by the Akim of the Western Kazakhstan Oblast and Managing Director of KazMunaiGas 27 May 2003 Tungush resettlement completed

–  –  –

Source: Social Baseline Study, October 2003.

21

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