Kazakhstan: Oil Strike Over in Zhanaozen

An oil strike that started in late September in the western Kazakhstan town of Zhanaozen – the scene of fatal industrial unrest in 2011 – has ended after the company caved in to strikers’ demands.

In contrast with that industrial dispute five years ago, company officials and authorities were quick to pursue mediation, in a reflection of the sensitivities that surround signs of public discontent against a background of broader economic stagnation.

The Zhanaozen standoff ended late on October 5, after private drilling company Burgylau agreed, with mediation from the authorities, to concessions, one striker told EurasiaNet.org.

“All the demands have been meet,” said Askar, a driller speaking under a pseudonym by telephone from Zhanaozen on October 6. “We’re satisfied. We’re already back at work today.”

The 2,300 or so strikers had downed their tools for six days running in pursuit of two goals: changes to the salary calculation system that would result in a pay rise and an end to what they described as intimidation of their choice of union leader.

The company agreed to review the way salaries are calculated, Alik Aydarbayev, the regional governor, said in remarks reported by Tengri News.

Strikers had been demanding that Burgylau switch to the salary calculation system used by KazMunayGaz, the main state employer in Kazakhstan’s oil industry. The company agreed instead to install a similar system that should see salaries go up by an unspecified amount.

The company had argued that it could not afford to raise salaries, which are already around double the national average, owing to the knock-on effect of low global oil prices.

Last year, drilling for new wells – Burgylau’s prime business – dropped by 40 percent and it will fall another 50 percent this year, Aset Magauov, deputy energy minister, said in July.

But now Burgylau is to be guaranteed new commissions worth 6 billion tenge ($18 million) to drill 34 new oil wells, and the tariffs for its work may be raised.

The company also dropped its opposition to the workers’ choice of trade union leader. Sadaukas (nicknamed “Saken”) Bekkaliyev, an oil worker who had been fired by the company for alleged misdemeanors that he denied, will now assume the chairmanship of the union.

Burgylau has agreed to support him in an appeal against a conviction for theft of company property that led to his dismissal in September, paving the way for his reinstatement.

The details of the deal that ended the strike were hammered out in a seven-hour marathon of negotiations on October 5 between the company, the strikers and the local authority delegation headed by Aydarbayev.

The governor of the energy-rich Mangystau Region had travelled 150 kilometers from the regional capital of Aktau on the Caspian Sea to mediate – a sign of how seriously the government takes any outbreak of industrial unrest in the energy sector.

In 2011, Zhanaozen was the scene of Kazakhstan’s most serious social unrest since independence, after a seven-month striker in the oil industry culminated with riots in which 16 people were shot dead by police.

Kazakhstan: Oil Strike Over in Zhanaozen

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