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Vital Caspian Graphics

Journalist Story 02: By Amina Jalilova, Novoye Pokolenie, 2004. Who will take care of drowning oil wells?


For three months in succession, a trail of oil has been seeping from submerged wells of the Pribrezhnoye oilfield in Atyrau, Kazakhstan. At one point, two oil spots were as large as several soccer fields. A recent inspection was more encouraging, detecting just a silvery film remaining on the water.

But we can only guess how much environmental damage the accident caused. Most probably, no alarm will be raised until, once again, shoals of fish and hundreds of sea animals are found dead.

Pribrezhnoye is far from being the only oilfield that was abandoned because of the advance of the Caspian Sea. With the rising sea level, some 15 oilfields have already been submerged in the coastal area. It is a long time since any oil has been extracted from these wells, even though many are allegedly owned by the Ministry of Energy and Mineral Resources. Their real owners cannot be found.

Mr Radus Latfullin, managing director of the Kazakhstan State Inspectorate for Supervision of Offshore Oil Safety, thinks such fields could become ministry property. The point is that late in March the national oil and gas company KazMunayGaz (KMG), while restructuring its subsidiaries, carried out a merger of EmbaMunayGaz (EMG) and UzenMunayGaz in Mangistau. It is quite possible that the post-merger KazMunayGaz Prospecting and Production Company simply disposed of useless abandoned fields, now under the authority of the ministry. But is not clear which agency is in charge of the fields where an accident may occur at any time, killing many representatives of the unique Caspian flora and fauna.

In March 2004 the Kazakhstan Offshore Oil Safety Inspectorate sent an enquiry to oil companies whose fields include submerged wells. The reply from EMG was that it had no such wells in its oil fields. But the inspectorate knew that there had been four flooded fields with at least a hundred wells in the territory under EMG’s control, with many of those wells submerged for over 17 years.

The spill at Pribrezhnoye was first recorded in December 2003. However because of thin ice cover, characteristic of the North Caspian’s shallow waters, special facilities were needed to stop it at the time. The Atyrau regional authorities sent a letter asking for the necessary funds to Vladimir Shkolnik, Minister of Energy and Mineral Resources. Of course no money was allocated to Atyrau. And that was only the start of a long ordeal. Among those to whom Atyrau’s environmental protection department appealed were the government-owned KazCaspianShelf Company, the international consortium AgipKCO, and even the Russian Astrakhan Naval Flotilla. It should be pointed out that back in 2001 when oil was spilt at the Southwest Tazhigali oilfield, it was AgipKCO that helped the region, even though it was in no way the group’s responsibility. This time, however, AgipKCO did not allocate any resources. In fact, nothing whatsoever was done during the three winter months.

In spring 2004 the Ministry of Energy and Mineral Resources invited bids for oil spill prevention and elimination. Almaz, a little known innovation firm won the tender. But to everyone’s surprise Pribrezhnoye was not on the list of oilfields where wells were to be urgently suspended. As the contractor was appointed the oil spots kept floating serenely on the surface of the sea. Almaz has still not even obtained all the necessary permits to start work on the submerged oilfields. So there is no knowing if any spill-prevention action will be taken in the hazardous area.

Given the confusion as to the ownership of the abandoned fields, the State Inspectorate ran into difficulties at a very early stage of its spillage control work on flooded fields, being unable to identify any authority for visiting the accident site. And what if further seepage or spillage is detected at the same sites? Presumably everything will be very much like it is at Pribrezhnoye where oil has been flowing into the sea without hindrance for the fourth month running.

However, it would be unfair to claim that nothing at all is being done. Naturally the authorities are aware of the problem, as reflected in the tender mentioned above. In 2004, the Ministry of Energy and Mineral Resources allocated 363m tenge (about $2.7m) for abandonment and conservation of emergency wells. But such funding is laughable. With the cost of abandoning or conserving a well ranging from 5m to 70m tenge, or an average of 30m tenge ($222,000), the budget will only cover 10 to 12 sites. The grand total for submerged offshore wells in the 15 fields is 1,128 in the coastal area alone, and poorly conserved onshore wells, which are just as hazardous, must be taken into account too.

The government also approved an Oil Industry Programme of Abandonment and Conservation of Overflow Oil and Hydrogeological Wells for 2004-13, which provides for abandoning 171 non-operating oil wells in Atyrau. But, here again, it is merely a drop in the ocean.

Regional authorities have allocated funds to pollution too. Atyrau has earmarked 36bn tenge ($266m) for the budget of its Integrated Environmental Programme for 2003-5. However the clearest indication of the programme’s efficiency is that at the time of the accident at Pribrezhnoye, Atyrau pleaded for money from the Centre. Was it because the programme was over-integrated?

Now Kazakhstan is starting to implement the Caspian shelf development programme. The country hopes the shelf will make enable oil production to be tripled. But how can deep-well sub-sea operations be managed if shallow water problems cannot be solved?

Note: Since this article was published there have been several small changes. The sub-contractor Almaz has fulfilled its promises and cleaned up five leaking oil wells. EMG is no longer operating, having become part of the KazMunayGaz Prospecting and Production Company.