Oil Workers Struggle to Make Ends Meet in Aktobe

Located in the north-west of the country, Aktobe is Kazakhstan’s largest region and produces roughly 5% of its annual oil output. Despite this relatively modern share, oil remains a key industry in the region.

For many people living near oil and gas fields, working in the energy sector is the only way to support themselves and their families. This is especially the case for those living in the region’s Temir district, where oil and gas is extracted from the ground beneath them, next to the Kokzhide sands. Yet the industry remains highly closed off, labor disputes are common, and trade unions often face pressure.

This is the second in a series of articles on the situation surrounding the Kokzhide groundwater, oil companies, and the plight of local residents. Read also the first part about the oil settlements around Kokzhide.

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Going on Strike

The largest oil company in the area is CNPC-Aktobemunaigas, a subsidiary of the Chinese national oil and gas corporation CNPC. It employs 5,400 people in Aktobe, plus hundreds more as service company contractors.

KMK Munai, another company also controlled by CNPC, employs about 275 people. It produces around 56,000 tons of oil annually across three fields (Kumsai, Mortyk, and Kokzhide), which is equivalent to just 0.05% of Kazakhstan’s production. More notably, in recent years, its workers have staged a number of high-profile protests.

In January 2021, for example, oil workers refused to return home once their shift had officially ended. Instead, they gathered at a production site, and demanded a 100% pay rise.

According to their statements, which were published by Radio Azattyk, an operator then received a monthly salary of 155,000 tenge (at the time equivalent to $370).

The striking KMK employees also complained about their working conditions.

“We had to buy satellite dishes and TVs ourselves for the trailers [where rotational workers live because there wasn’t enough space in the single-storey dormitory]. There were even cases where the guys bought washing machines with their own money. There are oil wells located 100-200 meters from here. Even if this was a five-star hotel, it would be impossible to live here. We are suffocating from the smell of sulfur and gas. Some of our guys started losing their hair and teeth,” one worker told Azattyk.

The strike ended after a week, when the workers managed to negotiate an increase of their wages up to 220-260 thousand tenge (42-66%), including additional pay for environmental hazards and safety conditions.

At the same time, 60 employees of AMK Munai, an oil service company which provides services to Firma Ada Oil, another oil producer operating the Bashenkol field, went on strike. They too demanded that their wages be doubled.

“Operators in our company earn 67,000 tenge, which is not enough to support a family, pay for utilities, or buy food... We don’t get paid properly for work on holidays or night shifts. All we want is a pay rise,” said one of the strikers in an appeal directed to the President Kassym-Jomart Tokayev.

Later, after reaching an unspecified “agreement” the workers ended the strike.

“We are oil workers and our salaries are so low, we are embarrassed to talk about them.” – Yerzhan Yelamanov.

Such strikes are typical for Kazakhstan’s oil and gas sector. Industry workers regularly complain that management disregards negotiated agreements and actively obstructs efforts to create independent trade unions.

“On the day we were electing a union chairperson, the management brought 50 people from their office in Aktobe down to the oil field. In the end, they were more than 100. We then started a second strike because at that point we knew that the elections wouldn’t be fair,” a striking worker from KMK Munai told Azattyk in 2021.

The union workers subsequently managed to elect their own president, Yerzhan Yelamanov. However, he says that he later was pressured by the company to step down and was ultimately dismissed for his union activities.

Ousting a Trade Union Leader

We meet with Yelamanov in one of Aktobe's parks. He is currently unemployed and said he is desperately looking for ways to feed his family.

He used to be a well operator at the oil company, where he also defended workers’ rights.

“I worked there as an operator for 10 years, and I was elected union chairman because people were dissatisfied with the work of the former leader,” Yelamanov says. “We had 180 members. When I took over, some of the workers linked to management immediately left the union. As soon as I started my work, I gotta say, the management did not like it.”

Yelamanov says he primarily raised issues related to workers’ low wages.

“When I joined in 2015, my salary was 70,000 tenge, which was disgraceful. After the strike, we got it increased to 220-260,000 tenge. But think about it. We are oil workers and our salaries are so low, we are embarrassed to talk about them,” he says. “The company sued me, claiming I had damaged its reputation. For writing in a letter to the Prime Minister that we had the lowest salaries among oil workers in the region. Later, I proved it all in court.”

He says that after the Qandy Qantar protests of January 2022, during which oil workers suspended work in solidarity with the people of Zhanaozen, who had taken to the streets to protest against a governmental removal of oil subsidies, he managed to visit the regional governor along with with other activists from local villages.

Yerzhan Yelamanov. Photo by Daniyar Mussirov.

“On January 7, we went to see [Ondasyn] Orazalin. Everyone had their own demands. I told him that we were being replaced with people from other companies, like Asia Munai Service, who were being told by management not to join our strike,” Yelamanov recounts.

Asia Munai Service provides outsourcing services to oil companies. Its owner and CEO are both Chinese nationals.

Hiring such companies is a popular way for large oil companies to save on staff costs and delegate workload.

Several oil sector veterans in the villages of Kenkiyak and Shubarshi near the oil production facilities complain to us that many operational units are being outsourced. They also report that working conditions have deteriorated since their companies were taken over by Chinese investors.

“My union activity spread to other companies. I didn’t have anything against anyone, I just wanted everything to be done as the law says it should be,” Yelamanov sighs.

“In the end, I got fired. One day, they issued me with three consecutive warnings: a reprimand, a severe reprimand, and then my contract was terminated. I tried fighting them in court for a while, but after that, I ended up in a pretty difficult financial situation—I have a wife and children. We eventually reached a settlement and I left the company.”

After Yelamanov was fired, he says five criminal cases were also brought against him. According to him, he won them all.

“In one of them for example, they charged me with fraud [a charge commonly brought against independent trade union activists – V.]. I went there with my trade union card and provided all the documents they asked for. Eventually, they closed the case,” he said.

Samat Berdenov. Photo by Daniyar Mussirov.

In This Economy?

When asked about the strikes and workers’ demands, Samat Berdenov, president of KMK Munai, said that he was severely cash-strapped.

“The companies extracting at Kazakhstan’s largest fields, such as Tengiz, Kashagan, or Karachaganak, have access to the Caspian Pipeline Consortium and the global market. We, in the Aktobe region, are bound by contracts with domestic buyers, at a fixed price. No matter what the [global] price per barrel is, even if it’s $150, it doesn’t affect our company’s finances,” Berdenov said in an interview.

He also noted that they produce “high-viscosity oil,” the extraction of which consumes a “huge” amount of electricity and gas reinjection, whereby natural gas is pumped back into the underground reservoir it comes from to increase pressure and hasten the flow of crude oil.

“Prices for gas reinjections have increased fivefold in two years, and electricity has doubled. And that’s not even mentioning the tax situation. So the question is: do I have anything left to use for salary increases?” Berdenov wondered.

Management from KMK Munai also told us that, despite facing adverse economic conditions, the company increases salaries in line with annual inflation.

CNPC-Aktobemunaigas stated that the company regularly raises salaries and that employees are bound by a collective bargaining agreement. However, the company did not provide information on salaries or the disparity between regular workers and senior management.

In their response, Firma Ada Oil gave no detailed answers about their employees’ working conditions or salaries, while Kazakhoil Aktobe and Urikhtau Operating, which also are active in the region, did not respond to our request for comment.

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