ASTANA. February 8 2007. Interfax-Kazakhstan - Karachaganak Petroleum Operating (KPO), which develops the Karachaganak oil and gas condensate field in West Kazakhstan, has refuted the conclusions of the Kazakhstan public environmental commission on KPO violating environment legislation.
KPO told Interfax that the company "is fully and implicitly observing all the requirements of Kazakhstan legislation," and is meeting all the commitments undertaken when it signed the main PSA in 1998, including its environmental commitments. It was reported earlier that the commission had decided that company activities did not comply with environmental legislation requirements. "KPO is violating legislative requirements, obliging subsurface resource developers to follow environmental regulations and requirements in their activities," the commission said. The commission included parliamentary deputies and representatives from non-government environmental organizations.
A KPO spokesman told Interfax that the company annually reduces harmful emissions together with an increase in production volumes. "Despite the increase in production volumes, the volume of emissions has dropped considerably. For example, the volume of emissions was 56,600 tons in 2004, 45,500 in 2005 and just 17,200 tons in 2006," he said. KPO produced 8.46 million tones of oil and 9.12 billion cubic meters of gas in 2004 and 10.38 million tones of oil and 11.92 billion cubic meters of gas in 2006. KPO developed a gas utilization program, according to which it plans to utilize 99.6% of the gas it produces, the spokesman said. On the basis of this program, which has been approved and passed through a government environmental survey, KPO put together a new project for maximum permissible emission levels. The first phase of development at the Karachaganak field was completed several years ago and the operation phase began. Launch work and testing of new equipment were the main reason behind unplanned emissions in 2004-2005, the spokesman said.
Commenting on complaints made by the commission about air monitoring and background pollution data discrepancies, the spokesman said pollution is monitored by the government company Kazgidromet. When working on maximum permissible emission levels in 2005, the company received information from Kazgidromet about background concentrations in the territory of the field, taking into account the field's influence on the environment. "The reduction of pollutant emission volumes and a lack of excess pollutant concentrations in the atmosphere is proved by the KPO monitoring program, which includes twice daily air samples at the border of the buffer area and four daily air samples in nearby villages. The program has been approved by the government monitoring agencies and is being implemented by a contracted organization with a government license," he said. "In addition to this, KPO installed eight automatic air monitoring stations at the boundary of the sanitary-and-protection zone in 2006, which operate round the clock. Data from these stations also confirm the lack of excess pollutant emissions in the atmosphere.
“The company does not agree with the commission's assertion that an increase in KPO fines and payments indicates the growing number of environment legislation violations. "KPO did make payments for excess emissions in 2004 and 2005, which were linked with the launch and testing of new facilities. It is incorrect to talk about a growing number of violations, based only on an analysis of the amount of payments made for the use of subsurface resources and fines paid, because payment rates, which are annually approved by the regional parliament of the West Kazakhstan region, increased more than six-fold in 2004-2006," the spokesman said.
The KPO official also refuted the commission's assertions that it suits KPO more to pay fines than implement environmental measures and improve the environmental situation in the production region. "The company is investing huge resources in developing the field and in environmental measures. Modern environmental technology has been introduced at Karachaganak. A strategy to reduce burnt gas volumes, which is reflected in the gas utilization program, has been developed. With the installation of additional gas ventilation compressors the need for planned gas incineration has dropped," he said.
KPO spent over $117 million on implementing environmental measures in 1998-2006, he said. "This investment was made in addition to the major capital investment in the construction of new industrial facilities," he said.
Karachaganak oil and gas condensate field is one of the world's largest with reserves of over 1.2 billion tones of liquid hydrocarbons and 1.3 trillion cubic meters of gas. KPO develops the field in accordance with a PSA signed with Kazakhstan in 1998. The consortium includes Eni of Italy and BG of Britain (32.5% each), Chevron of the United States (20%) and Russia's Lukoil (15%).
