KAZAKHSTAN SEEKS TO JOIN INTERNATIONAL OIL-SPILL-RESPONSE

UNCLAS SECTION 01 OF 03 ASTANA 002138

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SUBJECT: KAZAKHSTAN SEEKS TO JOIN INTERNATIONAL OIL-SPILL-RESPONSE
CONVENTIONS

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1. SUMMARY: Energy Officer attended a November workshop organized
by the Astana Center of the Organization for Security and
Cooperation in Europe (OSCE),with the support of the Kazakhstani
government and International Maritime Organization (IMO),on
ratification and implementation of international oil-spill-response
conventions. The event's approximately 30 participants included
international experts from the IMO, Oil Spill Preparedness and
Response Initiative (OSPRI),OSCE, and non-governmental
organizations and representatives from the Ministries of
Environmental Protection, Emergency Situations, and Energy and
Mineral Resources. Kazakhstan seeks to join international
oil-spill-response conventions and sign a protocol on joint
oil-spill response with other Caspian Sea littoral states. END
SUMMARY.

COMPANIES HELD REPONSIBLE FOR OIL-SPILL PREVENTION AND RESPONSE


2. Kazakhstan's national oil-response system presupposes a
responsibility of the companies to prevent and respond to oil spills
while the government coordinates and monitors action. The companies
that operate oil fields near the sea, process and transport crude,
and own ships are drafting plans for the prevention and liquidation
of oil spills. Oil and shipping companies also are building an
oil-spill-response base, training staff, and conducting drills.


3. Vadim Nee, an expert at the Astana OSCE Center, summarized the
elements of corporate oil-spill-response plans, which appropriate
ministries of the government of Kazakhstan must approve. The
National Oil Spill Contingency Plan, approved by Kazakhstan's
President Nursultan Nazarbayev in 2002, imposes special requirements
on the corporate oil-spill-response plans, which must contain
information on the allocation of high-risk oil objects, map
environmentally-vulnerable areas, define all spill risks, and
estimate the time required to liquidate oil spills of various
degrees. Nee summarized that Kazakhstan meets some elements
required by various international conventions, but these aspects are
all at the local level. He said that Kazakhstan must approve a
regional oil-spill-response plan that takes into account the needs
and capabilities of all Caspian Sea littoral states.


4. Musa Tanabayev, Director of the Oil and Gas Industry State
Control Committee of the Ministry of Emergency Situations (MES),
added that MES regularly holds seminars, drills, and exercises with
oil and gas companies. Tanabayev hailed Agip KCO for its creation
of a special oil-spill-response base with equipment able to pump
3,300 tons of crude an hour, which allows it to address first- and
second-degree oil spills. According to Tanabayev, national
maritime-shipping company Kazmortransflot also has resources to
react to oil spills, and the Aktau sea port can respond to first-
and second-degree oil spills.

WHILE STATE LEADS ON COORDINATION


5. According to Nee, national oil-spill-response legislation
includes the ecological code of 2007 and emergency situations law,
which contain clauses, but not chapters, on oil spills. The 2002
National Oil Spill Contingency Plan (NOSCP) outlines the
coordination between the government and companies when national
resources are utilized. Nee also explained that an operating
company alone handles a first-degree oil spill while NOSCP might
apply in case of a second-degree oil spills. Kazakhstan must use
its NOSCP in case of a third-degree oil spill.


6. Under the NOSCP, MES is responsible for equipment, staff, and
public announcements. The Ministry of Energy and Mineral Resources
(MEMR) must coordinate with oil and transportation companies, and
Ministry of Transportation and Communication (MTC) addresses
transportation and communication. Ministry of Environmental
Protection (MEP) monitors the incident, its environmental
consequences, and allocation of collected oil. The Ministry of
Health (MH) oversees medical aid and healthcare, and Akims

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(governors) of oblasts undertake restoration. The National Oil
Spill Commission, which consists of representatives from MES, MEMR,
MEP, MTC, MH, and Akims, coordinates and manages the organization of
all activities.


7. MEMR, MES, MEP, MTC, and Customs Committee are charged with
general prevention and preparation measures. Meanwhile, MES, air
crews, and ship crews are responsible for discovering and reporting
oil spills. Balzhan Mukhambetaliyeva, Director of the MEP
Environmental Regulation Department, highlighted that Kazakhstan
lacks the emergency funds of other countries, but it has insurance.
Although Kazakhstan planned to create a centralized
oil-spill-response base, it abandoned the idea due to complaints by
environmental non-governmental organizations. Mukhambetaliyeva
called for the establishment of a Caspian Littoral Monitoring Center
in Atyrau.

STATE MINISTRIES CALL FOR FUNDING AND REFORM


8. MEP's Mukhambetaliyeva also highlighted concerns regarding 1,485
abandoned wells in Atyrau and Mangistau oblasts at the Caspian Sea.
"Due to a risk of leakage, these abandoned wells endanger the
ecosystem of the Caspian Sea," she said. Even though the
AtyrauMunaiGasGeology Company insulates approximately 10 wells a
year, it lacks sufficient capacity and funds. As a result,
Mukhambetaliyeva estimates insulation of all abandoned wells will
take 15 years. MES's Tanabayev also expressed his concern about
this issue, but was not as dramatic. According to MEMR's 2004
appraisal of wells, 90 abandoned wells require insulation, of which
the state owns 48 wells and companies 42.


9. Murat Bekmagambetov, President of the Research Institute for
Transportation and Communication, mentioned Norway's
oil-spill-response base, which has equipment but no standing crew.
The members of oil-spill-response teams, which train regularly,
retain their permanent jobs. However, the companies and Norwegian
government agree on the availability of team members in case of an
incident. He recommended adoption of such a system in Kazakhstan.

KAZAKHSTAN TO JOIN INTERNATIONAL OIL-SPILL-RESPONSE CONVENTIONS


10. Among the rules adopted by Kazakhstan, Yerlan Dzhumashev,
Director of the Water Transportation Control Department at the MTC
Transportation Control Committee, listed those of the MTC on the
issuance of insurance certificates in case of an oil spill --
Kazmortransflot has such certificates -- and on ships' obligation to
declare any incident. The 1988 Convention for Efficient Technical
Monitoring of Ships, which Kazakhstan joined, requires contingency
plans for all ships. According to Dzhumashev, some discrepancies
exist in the laws, but amendments could address them. In
particular, Kazakhstan must amend the law to hold both crude and
ship owners responsible.


11. Alexander Keltchewsky, OSCE Ambassador, mentioned the 2007 OSCE
review of the environmental safety of maritime operations. At
multiple OSCE workshops, participants from MTC, MES, and MEP
expressed Kazakhstan's willingness to join the IMO and other
maritime conventions, such as the 1990 International Convention on
Oil Pollution Preparedness, Response and Cooperation (OPRC),1969
International Convention on Civil Liability for Oil Pollution Damage
(CLC),1971 International Convention on the Establishment of an
International Fund for Compensation for Oil Pollution Damage, and
International Convention on Civil Liability for Bunker Oil Pollution
Damage. Bekmagambetov called for a comparison and assessment of
local oil-spill-response plans for their compliance with
international standards.

JOINT OIL-SPILL-RESPONSE WITH OTHER CASPIAN SEA LITTORAL STATES


12. Peter Taylor of the Oil Spill Preparedness and Response
Initiative (OSPRI) stressed the need for cooperation between the

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government and companies. In existence for over five years in the
Black and Caspian Seas, OSPRI brings together six Black Sea littoral
states to tackle jointly oil spills. They hold regional drills with
companies. The Committee for Environmental Protection (CEP) and
International Maritime Organization (IMO) have organized seven
regional seminars in 2001-2008 on Caspian Sea environmental
cooperation. The Caspian Sea littoral states almost agreed on the
content of a regional plan, with signature of a protocol expected
during the November 10-12 meeting of governmental experts in Astana.
However, because it was not finalized, approval of the protocol now
is expected on January 25, 2010 in Moscow during the next meeting,
with signature later in Astana. Its implementation presupposes all
five Caspian Sea littoral states will cooperate in case of an oil
spill. According to Patricia Charlebois, IMO expert, an efficient
oil-spill response demands political will, appropriate legislation
in compliance with international conventions, a national
oil-spill-contingency plan, and good cooperation on local, regional,
and national levels.


13. COMMENT: According to the Director of Health, Safety,
Security, and Environment for Shell Kazakhstan, more than 20 minor
oil spills have occurred in the Caspian Sea in the last three years,
although none involved fields or vessels operated by international
oil companies. A major oil spill in the Caspian would be an
environmental disaster for the region's inhabitants and wildlife, as
well as carry significant economic and political consequences. An
August decree gives the government the right to amend or change
contracts if it determines that a subsoil user's actions could
substantially change Kazakhstan's economic interests or threaten its
national security. Although the decree does not define the above
terms, a major oil spill would certainly qualify, thus theoretically
jeopardizing hundreds of millions of dollars of investments by U.S.
and other international oil companies to develop offshore fields,
such as Kashagan and Pearls. International cooperation is therefore
critical to provide Kazakhstan the expertise, equipment, and
capability it needs to be able to respond to -- if not prevent -- a
major oil spill in the Caspian. END COMMENT.

HOAGLAND