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Summary

• With exploratory drilling in the North Caspian Sea scheduled to begin in two months, mistrust characterizes the dialogue between oil and environmental groups, reports industry expert Eric Anderson.
• Yet, the dialogue itself is an accomplishment given the sociopolitical history of the area which, until recently, would have prevented such an exchange.
• U.S. experience along with new technologies may hold solutions to this stalemate (see attached observations from Eric Anderson, who recently returned from working in Atyrau, Kazakhstan).

Context

• The Caspian Sea oil reserves are thought to be the second largest in the world (AP).
• Like other post-communist countries, Kazakhstan is an ethnically diverse country facing high unemployment (60%).
• Many people rely on the North Caspian for subsistence fishing as they have for generations.
• Oil drilling offers an opportunity for economic and political stability in the area. However, this opportunity could be undermined if the peoples’ ability to provide for themselves is sacrificed to oil development. Therefore it is crucial to address ecological concerns.

"Fish or Oil"

The controversy over oil development in the North Caspian Sea

Early April found me in Atyrau, Kazakhstan, on the Ural River just above the North Caspian Sea. Atyrau (formerly Gur’ yev before 1993) is the operational management center for the Offshore Kazakhstan International Oil Consortium (OKIOC). My trip was to deliver our oil spill response software, train health safety and environment (HSE) personnel and attend a public meeting at which OKIOC was presenting its goals, progress, and environmental policy. The agenda for the meeting had section titles such as: Care for the Environment, How is OKIOC Addressing HSE Concerns? and Project Implementation.

It is perhaps difficult for us in the U.S. to project ourselves into the cultural atmosphere of a country as far removed from us as Kazakhstan. For the period between the Russian Revolution (1917) until 1991, Kazakhstan was first under the rule of Russia and then the USSR. With the collapse of the former Soviet Union, Kazakhstan became an independent state, and in 1993 instituted a democratic government with strong control in the hands of its President, Nursultan Nazarbaev.

A proposed set of environmental regulations is now in the process of governmental approval. These draft regulations have set the standards for the North Caspian oil development project now underway. The plans are for exploratory drilling to begin within the next two months at a site in the middle of the North Caspian, Kashagan East.

I spent a week working with the OKIOC staff, most of whom are on a 28 day on and 28 day off schedule. This shift schedule is very common to the oil industry. In Atyrau, all OKIOC personnel live in the same hotel (The Chagala) and walk the 200 meters between the hotel and the OKIOC offices morning, noon, and evening. Working for a week in this environment means more than eight hours per day of contact. The day starts with breakfast at the OKIOC table, is punctuated with lunch and dinner at the same table, and may end with a beer at the bar. The living and eating arrangements led to a level of intimacy and openness not achieved in more typical corporate environments.

I was impressed by the competence and dedication of the OKIOC staff. It was obvious that they were committed to implementing an exploratory drilling program with up to date technology and excellent environmental controls. The multinational staff worked well together and interacted with a brisk professionalism that conveyed each of their competencies and their regard for those of their colleagues.

The public meeting failed to convey this sense to the parties gathered. Unfortunately, the previous norms of industrial development under the USSR were almost uniformly without any consideration for insults to the environment. Given this background history, it is easy to see why there would be many concerned citizens and environmental groups. Anecdotal information from several sources indicates that oil development and production continue in areas of the South Caspian (e.g. Baku, Azerbaijan) under lax controls and with disregard to spilled oil. Therefore, the mere promise of environmentally sound development practice was not sufficient to assuage the fears of many of the audience participants. The North Caspian is a very shallow water body supporting active fisheries which have sustained generations of fishermen. A public perception of an oil-or-fishery future appear to be common in Kazakhstan.

The atmosphere in the hall in Atyrau reminded me of post Exxon Valdez Alaska. There was a strong feeling of mistrust between the parties involved. During one of the breaks I saw one of the interpreters talking with one of the citizen’s groups representatives. As I approached he said "I don’t like dollars, dollars are bad!" I asked the translator what it was he thought was good. He looked puzzled at the question, so I asked it again. He responded that morality was good. When I queried what in particular was his interest, what was good, he shied away from me and said "I can’t talk about that here." I infer that he finds the atmosphere dangerous for bringing up what is truly valued for him.

My impression of the public meeting is that it was a very good first step. There is a long way to go, however, before there will be a feeling of mutual trust between the oil company and the private groups represented at the meeting. From our experiences in the U.S. over the last ten years, the following may be useful ideas for promoting trust:

• Having a level architecture for the meetings: all parties are seated at the same level in a round, not regimented setting,
• Having a joint oil company and private group sub committee generate the agenda for upcoming meetings,
• Giving time up-front for the major issues to be stated,
• Hiring a disinterested third party to chair the meeting itself.

A major obstacle impeding these two sides from working together is the lack of a common vocabulary for the definition and discussion of the perceived environmental risk. One way in which this dialog has developed in the U.S. over the past decade is through the joint implementation of oil spill drills. Having participated in these exercises, I have found that working together on a joint task has created more genuine respect between what had been oppositional groups than any direct discussion has done. It is my hope that such joint spill drills can be developed for the Kazakhstan environment.

Eric Anderson

Eric Anderson is an expert on environmental issues related to oil development and is President of ASA.