The EBRD is considering providing financing of up to $100 million to Vostok Energy to allow it to develop the Western part of Bortovoye licensed field in the Saratov Region. This would include some additional exploration and production drilling, completion of construction (already underway) of field facilities, gas processing unit and financing of implementation of the Environmental and Social Action Plan.
i) support to a small private, independent gas producer in Russia, where upstream oil and gas production is increasingly dominated by large state-owned companies; and
ii) setting standards of corporate governance and business/environmental conduct.
Vostok Energy Limited is a privately owned oil and gas company incorporated in 2006 in accordance with the laws of England and Wales. The Company via its subsidiary holds licences for oil and gas production in Saratov region.
Up to $60 million convertible debt loan.
The Company intends to spend over $220 million on development of its Bortovoye licence in Saratov region over the period from 2009 to 2011 inclusive.
This project has been categorized as B level (in accordance with the 2008 Environment and Social Policy) as it is not a green field development and it is not a major expansion of an existing facility. Therefore, the potential environmental and social impacts can readily be identified and assessed.
An independent environmental consultant was retained to complete an environmental audit of the existing facilities and the corporate environmental management resources/capabilities and to complete an environmental analysis of the proposed project. This work has included the preparation of an Environmental and Social Action Plan, a Compensation Framework and a Stakeholder Engagement Plan. The results of this work indicate that overall, the company is doing a good job of addressing environmental and social issues. They have a very effective program of communicating with the local communities and the district and municipal administration. They have already initiated the work on the environmental and occupational health and safety management systems, and plan on having these systems certified in accordance with international standards by the end of 2011. In addition to this, the company will be increasing their environment, health and safety (EHS) control onsite through the provision of up to six new positions (field personnel) on the EHS staff, mainly for the control of EHS related items with contractors. Other pertinent actions captured in the Environmental and Social Action Plan includes the following:
- Measures to increase security in the field, mainly at existing operating and future well head locations;
- Upgrades to security measures used for the storage of hazardous materials, such as the provision of impermeable ground cover and secondary enclosure at storage locations;
- Development of a Biodiversity Action Plan to ensure adequate protection and monitoring measures are implemented for all project activities;
- Compliance with the developed Stakeholder Engagement Plan (including the establishment of a Grievance Mechanism) and the Compensation Framework developed by the company;
- Development and implementation of measures for site reclamation including decommissioning;
- Development and implementation of a traffic management plan;
- Implementation of a comprehensive monitoring plan and communication of results of H2S monitoring to the local community;
- Allocation of community liaison responsibility to one person;
- Ensure compliance with the requirements for permitting related to construction and operation of the site; and
- Complete a cultural resources survey and development of chance find procedures.
In addition to the actions listed above, the company will ensure that all operations are conducted in accordance with EBRD Performance Requirements, and that pre-acquisition environmental audits are completed for any new assets, and that the required Environmental and Social Analysis or Environmental and Social Impact Assessments are completed for any new developments.
Mr. Aric Cunningham
Vostok Energy Limited
4/5 Park Place
London, SW1A 1LP, UK
Telephone: +44 (0)207 898 9236
Fax: +44 (0)207 898 9206
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