«Karachaganak Petroleum Operating BV (KPO) » is a consortium of companies with the aim of developing the Karachaganak oil and gas condensate field, one of the largest in the world, located in western Kazakhstan on the border with Russia.
The consortium includes such giants as: Chevron (18%) from the United States, BG Group (29,25%) from the UK, Eni from Italy (29.25%), LUKOIL (13.5%) from Russia, and a local company, KazMunayGas (10%). The BG Group and Eni are joint operators of the Karachaganak field.
KPO signed the Agreement on Karachaganak production with the Government of Kazakhstan in 1997. According to that document, all fines and welfare payments would be reimbursed to a consortium from the Kazakh profits from the field. Under the agreement, KPO will manage the Karachaganak project until 2038.
The consortium repeatedly states that it adheres to the highest standards of environmental protection and that it spends hundreds of millions of dollars on environmental projects. Furthermore, they point out that their development has brought the rate of gas utilization at Karachaganak to the world level, which allegedly demonstrates KPO's leadership among global and European oil and gas enterprises. However, evidence from the local population and government data shows an alarming level of pollution near the field.
Brief Chronicle of problems:
Twenty-five children in Berezovka were affected at the end of 2014 by poisonous emissions from the Karachaganak field, which caused them to feel sick. There are new cases every year of children feeling ill, as well as cases of acute ailment among adults. The affected children have not received adequate treatment for over a year, and KPO has failed to claim responsibility for the tragedy.
The relocation of Berezovka residents to the nearby town of Aksai began in November, after more than a decade of confrontation between residents and non-governmental organizations with the authorities and the leadership of KPO.
KPO was fined 9.5 billion tenge (about $28 million USD) for noncompliance with environmental laws, however, no one acknowledged the risks to the health of Berezovka residents.
On November 28, 2014, 25 students and several adults of Berezovka fainted, had seizures, and experienced dizziness, blood pressure surges, and severe headaches. Throughout the year, children continued to be ill and did not receive adequate treatment.
On November 29, 2014, a criminal case was opened "on the fact of mass sickness of students and teachers in Beryozovka."
In 2012, KPO paid $51 million for gas flaring in 2010. That same year, the court fined the company $31 million for excess emissions from 2010-2011.
The Regional Court of Houston, Texas found the American company Baker Hughes (a KPO contractor) guilty of bribing officials in Kazakhstan, resulting in lucrative contracts for American businesses to participate in the preparatory work on the Karachaganak field.
After three years of public outcry, the Attorney General of Kazakhstan declared it illegal to reduce the sanitary protection zone (SPZ) around the Karachaganak. That decision restored the sanitary zone around Berezovka from which it had previously been "withdrawn." Neither KPO nor the government compensated the residents for the long-term violation of their rights, nor did either entity make efforts to resettle the village.
Regional environmental management authorities temporarily withdrew KPO's license to work due to environmental violations, including the release of 56 thousand tons of pollutants into the atmosphere in 2004. In the course of a public environmental review conducted by the Kazakh Society of Nature Conservation, it was found that actual emissions of harmful substances into the atmosphere from KPO exceeded the permissible limits by 3.3 times in 2004 and 2.8 times in 2005.
KPO convinced the government of Kazakhstan to reduce the sanitary protection zone (SPZ) around the Karachaganak field from five kilometers (which included Berezovka) to three kilometers, stating that the field used the "best technology." This decision deprived the residents of any legal basis for resettlement. The SPZ was reduced without consulting state ecological expertise, and without informing local residents or seeking public participation in the decision-making process.