- Social and Environmental Assessment and Management Systems:
Land and Natural Environment:
Vostok owns exploration and oil and gas production licenses for Bortovoy Block, which is a 230 km long west-east tract and consists of seven oil/gas fields. The licensed block is located between the Volga River and the Kazakhstan border in Saratov region of the Russia Federation. The area consists of steppe and dry steppe and is sparsely populated. In addition to typical steppe vegetation, there are existing and abandoned farm lands. Saratov Regional Ornithological Reserve Area is partially overlaps one field of the licensed block (Mokrous field). There are a number of old oil exploration wells in the license area that were developed during the Soviet era, and these are currently either conserved or liquidated. Vostok will develop all seven fields as natural gas fields in the next few years by collecting and processing comprehensive seismic data for the field; re-entering some wells and developing some new wells; developing a system of branch pipelines for collecting natural gas in one or two collection points; building a gas processing plant; and constructing a connection pipeline to the gas distribution network operated by the Russian gas company Gazprom.
Environmental and Social Assessment:
Vostok hired external experts to conduct environmental and social impact assessments (ESIAs) for various project components in the Western four fields according to Russian regulatory requirements. Vostok also hired external experts to conduct a gap analysis for its existing EIA processes in order to meet the requirements of good international industry practices. As an IFC requirement, Vostok will hire external consultants to conduct an environmental and social impact assessment (ESIA) for the proposed gas treatment plant according to both Russian regulatory requirements and IFC’s Performance Standards. Vostok is also committed to follow IFC’s Performance Standards for all exploration activities and operations in the future.
Environmental and Social Management and Organization:
Vostok has an environmental, health, and safety (EHS) management system which is commensurate with its present operations. A qualified HSE engineer oversees its implementation. An EHS engineer is also responsible for commissioning ESIA studies for project components, obtaining emission and waste permits from the local authorities, reporting on the environmental, health and safety performance of the project to state agencies, and general oversight of HSE conditions in the company’s facilities. A Deputy Director is responsible for managing social and community development activities which include communication with the regional authorities in Saratov, local authorities of the three local districts where company’s facilities are located, preparing and conducting consultations with the local population and implementing community development projects in the company’s areas of operation. Vostok will scale up its EHS management system to match its exploration, construction, and production activities in the future and to ensure that the EHS management system meets IFC’s requirements, as set out in PS1.
Training, Monitoring, and Reporting:
Vostok has an established program to provide necessary training for all its employees in the field of EHS performances related to its operations, including training of new employees and quarterly refresher courses. The company’s workers and technical staff are routinely trained and certified according to Russian labor regulations. Vostok conducts routine EHS monitoring for its operations, including emissions monitoring by a qualified local consultancy. Vostok maintains its environmental and social performance records, and distributes these data through its internal reporting structure, as well as preparing reports for the regional EHS oversight agency (Rostekhnadzor).
- Labor and Working Conditions
Human Resources Policy and Management:
The company follows Russian labor regulations in recruiting, retaining and retiring its employees. The company’s subsidiary, Diall Alliance, currently has about 60 staff which are comprised of clerical staff in company’s office in Saratov and technical staff located at the company’s field facilities. All new hires are properly informed of labor conditions, benefits and remuneration prior to employment. Individual employment contracts also specify all benefits according to Russian labor regulations. Oil and gas fields are operated by week-long shifts, and additional benefits are available to operating staff shifts, such as transport, food and medical services. The company does not discriminate on an ethnic, religious or gender basis in its personnel decisions. However, additional benefits stipulated by the Russian labor code are made available to female employees. Currently, the company does not have any formal workers’ organizations due to its small size. The HR specialist is the contact person for grievances, labor disputes and other concerns. A labor commission is due to be formed in order to review grievances once they have been received by the HR Specialist.
Working Conditions:
Working conditions are in accordance with Russian labor regulations and workplaces are routinely monitored by the company in all facilities. Fields are equipped with all necessary facilities and food and accommodation is provided free to shift workers. Workers at any company facilities which are classified as hazardous, according to a Russian classification system, receive additional benefits and medical check-ups are conducted periodically for all employees working in the field. A workplace monitoring program has been established as a part of the company’s environmental monitoring program, and concentrations of the main air pollutants are routinely measured to avoid negative impact on workers’ health.
Retrenchment
There is no retrenchment currently planned by the company; rather an increase in the number of personnel is expected with the development of the project and expansion of exploration and production activities in the licensed field.
Occupational Health and Safety (OHS):
Operational safety is highly emphasized by Vostok. There are effective OHS procedures and adequate personal protection equipment (PPE) for each position in Vostok. There are routine OHS training programs, including quarterly refresher courses for its employees. Safety awareness is amongst the top concerns for both management and operators. There have been no fatal or serious accidents in Vostok’s operational history. Vostok also records all OHS statistical data carefully. The monitored parameters for the workplace conditions meet both local regulatory requirements and good international industry practices. As indicated in the ESAP, Vostok will include sulfur dioxide and noise measurements in its workplace monitoring program.
- Pollution Prevention and Abatement
Environmental Compliances:
In the current stage, the company only conducts seismic surveys and retrofits/operates existing wells, and therefore wastewater generated is negligible. For the future drillings, the produced wastewater will be re-injected back to the ground. Since hydrogen sulfide contents are relatively high in the associate gas, hydrogen sulfide is a key concern for the ambient environment. The company has a program to continuously monitor hydrogen sulfide in the ambient environment, which may come from fugitive emission and flares. The monitoring results meet both local regulatory requirements and IFC/WBG guideline limits. The other monitored parameters for air emissions and ambient air qualities meet both local requirements and IFC/WBG guideline limits. As indicated in the ESAP, Vostok will start monitoring sulfur dioxide and noise in the ambient environment. Vostok will also survey oil contamination of the soil at and near its drilling pads, and set up a database to maintain records of soil quality. The data will be updated periodically.
- Solid and Hazardous Wastes:
The household solid wastes generated in the company are transported to a licensed solid waste disposal facility near Saratov. Currently the company generates a limited amount of hazardous wastes. However, significant amounts of hazardous wastes will be generated during drillings in the future. The company will prepare an integrated drilling plan to minimize the amounts of hazardous wastes generated, which may include re-injection of drilling fluid and cuttings mixture back into the ground if possible, etc. The generated hazardous wastes will be sent to the local licensed hazardous waste management company for final disposal.
- Operational Hazards and Emergency Response (ER):
Well drilling and operations for oil and gas production could pose serious dangers and impacts to the employees, nearby communities, and surrounding environments. Vostok will review its safety procedures and equipment, and modify its ER plan to ensure that the operational safety and ER plan meet good international industry practices. Vostok’s ER plans cover spills, well blowout, fire, and medical emergency for carbon monoxide and hydrogen sulfide. There are internal trained volunteer fire-fighting teams, which conduct five to six ER drills per year. Vostok also coordinates with the Blowout Prevention Team (BPT) and Gas Safety Team (GST) of the local government agencies in its ER drills.
Greenhouse Gases (GHG) and Flaring:
Currently the company generates approximately 40,000 tons of carbon dioxide equivalent GHG per year, which mainly comes from associated gas flaring. Once the proposed gas treatment plant is finished, all the associated gas will be routed to the treatment for removal of hydrogen sulfide before being sold to the gas network. As a result, the flaring will only be for emergency and safety purposes and GHG generation from flaring will be dramatically reduced.
- Community Health, Safety, and Security
Community Health, Safety and Security:
The population in the steppe areas is sparse. The existing wells are approximately one to seven kilometers from the nearest communities. The proposed gas treatment plant is approximately five kilometers from the nearest community. The routine operations at Vostok do not have significant impacts on nearby communities. However, in an extreme scenario, such as a well blowout, there are potentially significant impacts to these communities.
The communities near Karpenskoe field are constructing a reservoir to collect and store potable water about two kilometers away from the nearest wells. As indicated in the ESAP, Vostok will take additional methods for nearby wells to prevent polluting the water, including fugitive dust control and constructing an additional berm to prevent spill runoff. Community members and local elected officials expressed concern about the importance of proper monitoring of emissions from the wells, and the company has addressed these concerns by reducing the number of flaring points around Karpenka village to one, and by developing a comprehensive ambient air monitoring program with the help of qualified external experts
Emergency Preparedness and Response:
Vostok has ER plans available and conducts routine ER drills. It also coordinates with local BPT/GSTnt agencies in its ER drills. In accordance with the ESAP, Vostok will provide necessary ER training for affected local communities and conduct joint ER drills together with these local communities and BPT/GST.
Security Personnel:
Currently the operators at well pads also take the responsibility for safeguard of all property. In the future, Vostok will either set up its own security force or contract licensed security forces. Vostok is committed to following the requirements of the internationally recognized voluntary principles for security force management.
- Land Acquisition and Involuntary Resettlement
Land Acquisition.
The company currently leases and plans to lease or acquire a number of land plots for its activities. Currently the company leases 15 ha of farm or abandoned farm lands for its operations. For the future development of the project the company plans to temporarily lease about 330 ha, as well as to acquire permanently about 30 ha. Most leased lands are agricultural lands owned by individuals, farmer cooperatives or by local municipalities. All lands used or planned to be used for the company’s facilities are uninhabited and are at least one kilometer distant from nearby communities. No resettlement of individuals or removal of buildings or other assets from leased lands is currently expected. All land is acquired or leased from the private owners (individual farmers or farmers’ cooperatives) or from the local municipalities in willing-buyer-willing-seller transactions. In the case of private individuals and farmers’ cooperative owners, the lease price is market-based. In the case of transaction with municipality governments mandated rates of lease apply. In the latter case, according to the Russian regulations, local municipalities announce tenders for leases of land to achieve transparency of transactions and to select highest bids.
Temporary Use of Land for Pipeline Construction and Seismic Activities.
Land allotment for branch pipeline construction is conducted as a temporary lease. The company will lease land plots for the construction period of buried branch pipelines (usually for a one year period) and rehabilitate the land surface with the use of top soil. The land is then returned to its owners for restricted use mandated by government regulation (i.e. preventing construction and other digging works). Such restrictions do not affect agricultural activities on leased farm lands. The compensation for temporary lease of the land for pipeline construction includes the land lease component as well as compensation for crops lost and is paid directly to land owners (individuals, farmers’ cooperatives or local municipality). Multiple seismic activities are undertaken and planned by the company. Land allotment for seismic activities is conducted as temporary lease for locations of seismic equipment and access to these locations. Lease payments that are paid for seismic activities include compensation for crops or agricultural activities loss (in case of agricultural land) and are paid in a mutually agreed amount to the owners of the land (individuals, farmers’ cooperatives or local municipality).
- Biodiversity Conservation and Sustainable Natural Resource Management.
Part of Mokrous field of the licensed block is located inside the Saratov Ornithological Reserve Area, set up by Russian Federal government to restrict hunting and industrial activities in order to protect the habitat for rare species, including bustard. Vostok has contracted the Ecology and Evolution Institute of Russian Academy of Science (EEIRAS) to conduct comprehensive research in Karpenskoe field. The research will establish the baseline population of endangered and other species in the field, catalog population numbers in the database by types and headcount of rare species, assess potential impacts of Vostok’s operations, and propose mitigation methods and improvements of project design (if needed). In accordance with IFC’s requirement, Vostok will incorporate recommendations in its project design and continue its cooperation with EEIRAC to monitor the number of the rare species throughout the life of the project, correct any practices that may impact the habitats, and if possible, take additional effort to improve the habitats.
- Cultural Heritage
Cultural Heritage Sites
Saratov region of Russia is an area with many existing archaeological sites. In particular, an area of Paleolithic sites is located north-east of the left bank of the Volga river in the Saratov region, and this includes the area of the Mokrous field. Currently, no sites of cultural or historical value were identified in the areas of existing or proposed company’s operations. The company will conduct an archaeological review of project design, proposed facilities locations and branch pipelines routes by retaining the services of the state Archaeological Institute. Project design will incorporate measures that may be proposed by the Institute, should any sites of archaeological significance be discovered in the proposed project location. These may include re-routing of pipelines or further research and removal of cultural and historical artifacts by qualified archaeologists.
Chance Find Procedure
The company uses a chance find procedure stipulated by Russian regulation for dealing with historical and cultural artifacts during the construction. The procedure requires stopping construction work, notification of the company’s management and informing the archaeological research center that will conduct further review and assessment of the site. In accordance with IFC’s request, the company will ensure implementation of chance find procedure by its construction contractors.
