Kashagan: ​And now the weather

By Laura Suleimenova

We published several articles about incredibly favorable attitude of the consortium towards its foreign contractors working at Kashagan project and who, despite serious failures in their activities, again and again become bid winners.

Unpleasant Story with Pipes

There are many examples of such condescension to certain contractors. Let's take, for example, the Italian oilfield services company “Saipem" that for the second time, as general contractor, was awarded the contract for construction of offshore pipelines running from D island to Bolashak plant. To recall, the initial pipelines that were laid by the same Saipem jointly with its subsidiary “Ersai Caspian Contractor", failed right after the start up in 2013, therefore postponing the re-start of the Kashagan project at least until 2016.

Or we can recollect the story with the Italian company “Bonatti SpA" that spilled a large amount of diesel fuel on the territory of Bolashak plant a few years ago. NCOC special services have been attracted for cleaning activities, but so far they brought no success yet. Despite that, “Bonatti" wins the bid for replacement of onshore field pipelines (the cost of the contract is $200 million).

However in our publication we will talk about absolutely different company – a small branch of foreign firm – “BMT ARGOS B.V. in Atyrau, Kazakhstan". However, on this very example it is visible how considerable amounts of money at major projects flow past the state treasury.

The above-mentioned company provided weather forecast services, as well as water level and general hydrometeorological services for Agip KCO, currently NCOC N.V. Since the events mentioned below took place in 2008-2014 – i.e. prior to merging of companies at Kashagan project into one unified company (see “North Caspian project to have one joint company") - the name of Agip KCO appears in audit materials of supervisory authorities.

So, BMT ARGOS BV during the period from 2008 to 2015 concluded several contracts with Agip KCO in Atyrau related to weather forecast, water level and general hydrometeorological services.

Past the State Treasury

According to our information, BMT ARGOS BV all these years actively attracted technical experts from overseas. However, all of them visited Atyrau on business visas under the pretext of providing business consultations, and only after several months their work permits were processed, if ever processed. They all worked in Atyrau and were paid from the head office of BMT ARGOS BV. Then it appears that Kazakhstan service companies were rightfully raising the issue that they get only “breadcrumbs" from Kashagan pie, because foreign contractors at Kashagan and Tengiz projects can pay very quietly salaries to the foreign experts through the head offices or recruiting agencies, and that is not reflected in any reporting forms at all.

Although, these facts were voiced at the recent parliamentary hearings, the government, so far, showed no reaction. Meanwhile, from such actions of foreign companies the state budget suffers serious damages and losses in the form of short-received obligatory taxes and payments.

Crew of Invisibles

It tool our editorial office a long time to wait for responses to corresponding inquiries that we sent to State Revenues Department and State Labour Inspection Adminstration. But we received the answers. Unscheduled audit of State Labour Inspection carried out from May 6 to June 9, 2015 showed that BMT ARGOS BV branch many times attracted technical experts from overseas without obtaining work permits and work visas.

Foreign workers upon their arrival to Atyrau first got business visas (without the right for permanent work). Thus, foreign experts were located in Atyrau office of BMT ARGOS BV and worked there on a constant basis, that were confirmed by time sheets with description in English of type of work performed.

Such foreign experts as Craig Gray David, Mark Van Der Putte, John Lindley(port of Bautino), Sean MacDermont (port of Bautino), Robert Koyenders, Nicholas Philp, Coy Gavin Paul stayed in the country. And only 2 experts had work permits. For example, Craig Gray David worked in Atyrau since February, 2013, but he got work permit only on April 23, 2013, work visa on May 29, 2013. Other experts from the list worked here illegally.

I Want Expat's Salary

As it appears from audit materials, the company didn't present to labour inspectorate neither the list of employees, nor any other documents indicating the number of staff and employees' salaries for 2011-2012.

Meanwhile the study of the staff list of BMT ARGOS BV revealed a big difference in salaries of expats and workers from Kazakhstan. For example, monthly salary of expat on the position -“chief technical specialist" in average was 1,2 million tenge in 2013, 1,6 million tenge in 2014 and 1,4 million tenge in 2015.. The average salary of Kazakhstan engineer on similar positions was 400 thousand tenge.

Salary of an engineer who estimated ice condition on the Caspian Sea was even more: monthly salary of Nicholas Philip in 2014-2015 was 5,5 million tenge. However, perhaps, we really don't have experts of such caliber in our country.

An enormous difference in salaries the state labour inspectorate connects with absence of wage scale in “BMT ARGOS BV" (the scheme of official salaries). Thus, according to inspection, Article 126, part 1 of RoK Labour Code was violated.

“Everything According to the Contract"

According to our sources, BMT ARGOS BV since 2008 until today implemented two contracts for Agip KCO at Kashagan project. Under the first contract signed for the period from 2008 to 2013, the settlement of payments between Agip and BMT ARGOS were conducted through the head office of the latter in Netherlands, although BMT ARGOS has already opened its official branch in Atyrau in 2011. According to our data, during tender procedures Agip requires from foreign companies to open their branches in Kazakhstan within 6 months, in case they conclude the contract.

During the preparation of this publication, the department informed us that the company disagreed with violations specified in the notice and presented their arguments.

The foreign company claims that financial settlements were made through head office in accordance with the terms of concluded contract.

In this regard the state revenues department of Atyrau Oblast asked the Committee of state revenues under the RoK Ministry of Finance to send inquiry to competent authorities of the country of residence of BMT ARGOS BV.

While the Kazakhstan supervisory authorities are finding the nuances of activity of the company, according to our data, BMT ARGOS is expecting to receive one more large contract from NCOC.

We failed to find out the opinion of the management of the company re. the facts revealed during audits: we were informed by the office of BMT ARGOS BV that Head of Branch Jean-Paul Lindeboom, who was asked to come to prosecutor's office the day before, left this morning, on June 16, for Netherlands, and the regional manager Svetlana Saparova is on leave.

Collage by Sasha Denisov