Kazakh Minister of Economic denies participation of his company in pipeline welding, but at Kashagan they state the reverse

Erbolat Dosayev denies participation of ERSAI Caspian Contractor company in supply and welding of defective pipes at Kashagan field, where oil production has been suspended for the next two years, azh.zk reports, citing KazTAG.

“The meeting with main investors is scheduled for April 17. We are planning to discuss the ongoing activities and what should be done until the end of 2014. They should propose to us a detailed plan – what is necessary to replace and what is not. If the question is about ERSAI Caspian Contractor, then it participated in activities (at Kashagan - KazTAG), but it has no relation to welding works and pipe supplies. Therefore, I would like you to ask this question only once, and we will not repeat it any more”, - said Erbolat Dosayev, the Minister of Economic and Budget Planning of Kazakhstan after a briefing at the Central Communications Service last Monday.

There is every indication thatDosayev completely rejects the participation of the company that he jointly owns with his partner in business and colleague in the government - Nurlan Kapparov, the Minister of Environment and Water Resources, and, as we learnt, has a direct relationship to emergency situation at the field. If for ministers the attempt to escape from direct questions is the saving of the face, then for us the attempt to find the truth is the professional rule.

Therefore our agency five days ago sent an official inquiry to ERSAI Caspian Contractor management with detailed list of questions, related to production shutdown due to low-quality pipes. The reply signed by Jan Chang, Deputy General Director, was fast and severe.

There are three paragraphs in the letter. In the first paragraph the company states that it is not the supplier of pipes. In the second - there was an insistent recommendation to approach the competent party and to check the information source. And in the last - the warning about the protection of its interests and business reputation. The editorial office did so. We decided to re-check our sources and approached the competent authorities. In this we received assistance from our colleagues.

Below is the answer that AkZhaik newspaper received from the press service of the operator of the Kashagan project for its inquiry. Press service reports that NCOC eventually voiced the grade of steel that they used for Kashagan pipelines and the names of the companies that delivered pipes, welded the joints and laid the pipelines.

The reply reads: “The steel composition meets X60 specifications. Pipes were delivered by various companies, one of them was Sumitomo. Pipes were welded and laid by Saipem company (joint venture between ERSAI Caspian Contractor LLP, the division of Lancaster Group, and the Italian company Saipem”).

Now let’s look at the journalistic investigation that was carried out by business weekly “Kursiv”. The editorial office got hold of “the Inspection Statement” that was available thanks to local ecologists and the competent authority – the Department of the Committee of National Security of Atyrau Oblast.

It reads, in particular, “... during inspection 63 spots of potential cracks have been identified. The latest cracks were identified by the British experts. The company didn’t’ even envisage about them. Out of 32 cracks at that time of inspection - 29 were on the welded joints. Welding operations were conducted by the general contractor of the project, the Italian company Saipem and its contractor ERSAI Caspian Contractor.

The inspectors stated the irresponsibility and malicious negligence allowed by contractors during  performance of construction works. The journalists of the weekly showed this inspection statement to the expert - the head of one of KazTransOil company divisions. His reaction was stormy: “If I constructed such pipeline, I would have been in jail!”.

On April 17, in Astana there will meet all those who have a relation to the project of the century – Kashagan field.  Probably, they will define the losses and again ask the government of for the delay of commercial production. It is unlikely that foreign investors will leave the coast of the Caspian Sea  -  in the oil game there is a very desirable piece of cake, A sharp evidence of that - without waiting for the results of investigation of emergency situation at Kashagan, the tender has been already announced for the delivery and installation of new pipes...