Eye-Popping

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by Joshua Foust on 1/30/2012 · 2 comments

Andrew Kramer has a report on Uncle Nazzy’s latest attempt to soothe Zhanaozen with sweet, sweet cash:

Prime Minister Karim Q. Massimov said in a telephone interview last week that the government would give oil workers raises of up to several hundred dollars a month and would invest about $300 million in the town. “I strongly believe this issue will be resolved soon and it will not spread to the foreign companies working in Kazakhstan,” he said.

He said the state oil company resisted meeting worker demands earlier in part because salaries in this town were already about 20 percent higher than those of state oil company employees elsewhere, the result of earlier, successful strikes.

We’ll see what happens. The thing with this is, it will probably work, at least in the sense of defusing the worst of the tensions that inspired protesters to be throwing rocks at the SWAT teams. So far, Nazarbayev’s advisers — who include Tony Blair’s consulting firm — seem to be giving sound advice: firing people at the top, launching investigations, and promising reforms.

That being said, the Kazakh government is still behaving unacceptably. The women who alleged abuse by the Kazakh police need to be acknowledged and the police responsible need to be punished. The award ceremony for the policy involved in the crackdown was worse than tacky: it was openly insulting to the families who lost loved ones when those warmly rewarded police shot them in the back then beat them to death. And away from Zhanaozen, the Kazakh government is still harassing and constraining its opposition movement, which is hardly the behavior of a mature, adult country (whatever its paens to democratization).

The Kazakh government has a long way to go, in other words. Kramer tries to tie this latest move to the current round of haggling over access to Kashagan, a rich oil field in the North Caspian. Last year, Shell closed its Kashagan office last year over a difference in price estimates between the Dutch company and Astana. The move led to a flurry of renegotiations with international oil firms, and led to an announced breakthrough last

ExxonMobil and ConoccoPhillips have the big U.S. stakes in Kashagan (all the oil companies involved there, which include Eni, Shell, and Total, share a 16.8% ownership). Last year, during the intrigue over Shell closing its office, there were rumors that ExxonMobil would reduce its stake in the project, but those never panned out.

The stakes at Kashagan are huge. It, along with the Tenghiz field Chevron famously got access to through disgraced broker James Giffen, was one of the largest oil fields discovered in the last 30 years. Like Tenghiz, the international wrangling over developing the field has been drawn out and halting. Still, the numbers are hard to argue. Kramer notes in his piece:

The latest conflagration exploded just as a consortium of oil companies including Exxon was completing investment decisions on a huge new field just offshore in the Caspian Sea, called Kashagan. The companies have already invested $33 billion in the project, and say they will need to invest $154 billion more over the next decade or so.

Kazakhstan represents a potential new source of significant amounts of crude oil. Critically important for the United States, that oil lies outside of the Middle East and Kazakhstan is not a member of the Organization of Petroleum Exporting Countries cartel.

Much as people gripe and moan about countries strategically developing energy sources, it is difficult to write off such eye-popping numbers. Most of the striking oil workers have accepted new jobs, going along with the same bargain Nazarbayev has promised his country the last two decades: forget about liberty or freedom or speech, and in return I’ll keep you employed. It’s kind of worked so far, but as the Zhanaozen protests (and the initial hints of terrorism) show, that bargain is clearly beginning to fray.

Nazarbayev does not have infinite time to initiate reforms and open his country’s politics and economy up like the rest of the developed world. I hope he decides to begin that transition before there’s another tragedy like Zhanaozen.

Image: the Eusebi Group’s Kashagan platform.


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– author of 1849 posts on Registan.net.

Joshua Foust is a Fellow at the American Security Project and the author of Afghanistan Journal: Selections from Registan.net. His research focuses primarily on Central and South Asia. Joshua is a correspondent for The Atlantic and a columnist for PBS Need to Know. Joshua appears regularly on the BBC World News, Aljazeera, and international public radio. Joshua's writing has appeared in the Columbia Journalism Review, Foreign Policy’s AfPak Channel, the New York Times, Reuters, and the Christian Science Monitor. Follow him on twitter: @joshuafoust

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{ 2 comments }

alima_bissenova January 30, 2012 at 11:08 am

This piece by Kramer is CLOSER to the truth but still NOT the whole truth…

First of all, the strikes have been more prominent at the national oil company precisely because it doesn’t have Jesuitic “divide and rule” policies and filters that Western oil companies have…In Zhanaozen, the Kazakh national oil company hires local people…it doesn’t shuffle workers from somewhere else and it doesn’t create hierarchies between the local workers hired locally and supposedly more qualified workers who come from somewhere else. So, by and large, it is not the government security that is preventing workers from organizing at Chevron (otherwise if they are so strong and shrewd why couldn’t they prevent the strikes at their own company?!) but Chevron’s employment policies — how they hire people, how they divide them in groups, how they make them work (mostly through so-called “vahtovyi metod”) when people don’t have a chance to “grow roots”…Also, I am not sure how the average ”

Secondly, Kramer writes “the workers demanded a bonus amounting to about $800 a month for the average worker,” which is not exactly the truth. The workers demanded the repayment of the hardship coefficient and were either misled or willingly embraced a misleading explanation offered to them by Sokolova into how this coefficient should be calculated. It is one thing to ask for a bonus and it is another thing to ask for something that you supposedly have been underpaid. The second thing has a different moral valency. Also…I don’t know how he arrived at the $ 800 average figure? Did he average it out himself or was it offered to him as an average.

Thirdly, the trade union lawyer Sokolova was indeed a trade union lawyer for a few months. But just before that, in 2010, she was a head of the HR department of KarazhanbasMunai jointly owned by the Kazakh and Chinese oil companies with a salary of 1.5 million tenge a month (10,000 USD). She had a falling with the KarazhanbasMunai asking them for 86 million tenge (!!) severance payment. In the court case, it was established that she blackmailed the company…

alima_bissenova January 30, 2012 at 4:22 pm

///Most of the striking oil workers have accepted new jobs, going along with the same bargain Nazarbayev has promised his country the last two decades: forget about liberty or freedom or speech, and in return I’ll keep you employed. It’s kind of worked so far, but as the Zhanaozen protests (and the initial hints of terrorism) show, that bargain is clearly beginning to fray.///

this is a misreading of the situation …

it has never been about the freedom of speech or any other abstract words and values…It has always been about employment and wages. In fact, workers had used the freedom of speech (they occupied the main square of Zhanaozen for several months LONGER then OWS had occuppied the Zuchinni park in NYC) to bargain for better employment conditions

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