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Cases / Oil spill · Russia · 1994–2004

Usinsk pipeline spill (Komi, 1994) and the World Bank and EBRD emergency loans

Nature's voice · report
Over 20,000 tons of oil reached my Kolva River in 1994, according to the World Bank.
Did nature suffer? Yes. Harm is on record. Disputed
Recorded
  • Komineft data put the contaminated and damaged area at 270.4 hectares; by May 2002, 237 of those hectares had been reclaimed and about 40,000 cubic metres of sludge remained in containment polygons. World Bank
  • In September 2001 sampling, my upper and middle Quaternary aquifers were within maximum permissible concentrations and my shallow water-carrying regions were slightly contaminated, according to the World Bank completion report. World Bank
  • Burning of my peat bogs during clean-up 'just drove the oil further down', according to the World Bank completion report. World Bank
  • Fishermen found tar balls at Mutni Materik, about 125 miles downriver, and Komineft acknowledged oil on my river banks for at least 30 miles, according to the Christian Science Monitor in 1994. The Christian Science Monitor
  • According to Bellona (2007, citing the newspaper Tribuna), whitefish, white salmon and grayling declined sharply in my Kolva from 1995, spawning grounds declined in the Usa, and migratory birds died; it also reported cadmium and zinc in potato samples and lead in cows' and mothers' milk. Bellona
  • More than 100,000 tonnes of oil entered my waters.
    Cumulative, World Bank (1995 memorandum and 2002 completion report); stated as 730,000 barrels.
What the record lacks: 2 none on record · 3 insufficient · 6 disputed · 1 unclear See the gaps
Accounts of the harm differ
How much oil was released in 1994?
  • International bodies World Bank (1995 memorandum, 2002 completion report): 'In excess of 100,000 tons (730,000 barrels)' cumulatively; 'over 20,000 tons' into the Kolva River. World Bank
  • Company or project Komineft, via Oil & Gas Journal (31 October 1994): 102,200 barrels. Oil & Gas Journal
  • Company or project Komineft officials, via the Christian Science Monitor (31 October 1994): 84,000 barrels escaped; tens, possibly hundreds, of thousands of barrels also soaked into the tundra. The Christian Science Monitor
  • Company or project Komineft spokesman Valery Ilyin, via the Christian Science Monitor (28 October 1994): 3.6 million gallons. The Christian Science Monitor
  • Government and regulators 'Other Russian officials', via Oil & Gas Journal: 219,000–438,000 barrels. Oil & Gas Journal
  • Government and regulators William White, US Deputy Energy Secretary: Up to 80 million gallons, as told to the New York Times (via the Christian Science Monitor, 28 October 1994); he also passed on '2 million bbl' from American oil companies in the area (Oil & Gas Journal). The Christian Science Monitor
  • Communities and civil society Ivan Khudyakov, Movement to Save the Pechora (Usinsk branch): Tens of thousands of tons, not hundreds of thousands, based on pipe capacity. The Christian Science Monitor
  • Communities and civil society Bellona (2007), citing the newspaper Tribuna: The 'official version' was 100,000–120,000 tonnes. Bellona
How large was the contaminated area?
  • Government and regulators Ministry of Emergency Situations, via the Christian Science Monitor: 26 square miles of tundra soaked. The Christian Science Monitor
  • Company or project Komineft data, via the World Bank completion report: 270.4 hectares contaminated and damaged. World Bank
  • Communities and civil society Bellona (2007): 'Official estimates' of 115 hectares were 'strongly underestimated'; more than 400 hectares were cleansed over four years; Lukoil's 1999 inventory found 750 hectares still needing remediation. Bellona
How serious was the accident, and how soon would it be cleaned up?
  • Government and regulators Energy Ministry spokesman: 'This event is nothing out of the ordinary.' The Christian Science Monitor
  • Government and regulators Environment Ministry press chief: 'This is potentially a very dangerous accident for the environment.' The Christian Science Monitor
  • Company or project Komineft president (October 1994): All the pollution would be cleaned up by April or May 1995. The Christian Science Monitor
  • International bodies World Bank completion report (2002): By May 2002, 237 of 270 ha had been reclaimed according to Komineft figures; 33 ha were left for 2002–2003. World Bank

Repeated failures of the Kharyaga–Usinsk oil pipeline in the Komi Republic in 1994 released oil into bogs, creeks and the Kolva River. The World Bank lent US$99 million and the EBRD US$25 million to the Russian Federation, on-lent to the pipeline operator Komineft; published estimates of the volume spilled differ widely.

US$99m + US$25mEmergency loans to the Russian Federation, on-lent to Komineft
IBRD loan 3872-RU approved 25 April 1995; EBRD loan signed 5 May 1995. Disbursed: US$98.41m (IBRD) and US$17.5m (EBRD), according to the World Bank's evaluation.

Status As of 2005: both emergency loans had closed by 2002, and Lukoil reported that the 1994 accident area was released from 'environmental disaster zone' status in 2004.

What?
Repeated failures of the Kharyaga–Usinsk oil pipeline in 1994 released oil into bogs, creeks and the Kolva River in the Komi Republic. The World Bank lent US$99 million and the EBRD US$25 million to the Russian Federation, on-lent to Komineft, to contain and clean up the spill and replace the pipeline. World Bank
Where?
Usinsk district, Komi Republic, north of European Russia: bogs and creeks along the Kharyaga–Usinsk pipeline; oil reached the Kolva River, a tributary system of the Usa and Pechora. World Bank
When?
Leaks from February 1994 to January 1995, with failures in August–September 1994; emergency declared 10 October 1994; IBRD Board approval 25 April 1995; EBRD loan signed 5 May 1995; loans closed 31 December 1999 (EBRD) and 30 June 2002 (IBRD). World Bank
Who?
Gained
  • Komineft — Received the on-lent IBRD and EBRD loans; the pipeline stayed in operation, carrying up to 11 million tons of oil a year World Bank
  • International management contractor AES/Hartek — Contract of US$50 million (IBRD part US$41 million), signed March 1995 World Bank
  • JSC Poisk — Pipeline rehabilitation contract of US$29.5 million (IBRD part US$24 million); 64.2 km of 530 mm pipe replaced World Bank
  • Affected villages — Social mitigation programme of US$4.53 million, of which US$3.95 million was committed World Bank
Lost
  • Komineft — Assumed the foreign exchange risk on the on-lent loans and, under Decree No. 629, was to repay the EBRD loan from its own funds; its contribution in the financing plan was US$16 million World Bank
  • Russian Federation — Borrower of the US$99 million and US$25 million loans; advanced US$12 million for the management contractor's mobilisation World Bank
Harmed
  • Kolva River — Over 20,000 tons of oil (World Bank) World Bank
  • Bogs, creeks and tundra around Usinsk — 270.4 hectares contaminated and damaged according to Komineft data; 237 of 270 ha reclaimed by May 2002 World Bank
  • Villages and herders in the Kolva basin — Grazing floodplains and water sources affected; villagers dissatisfied with the mitigation programme World Bank
Why?
The World Bank said Komineft knew in 1992 that the pipeline's integrity was deteriorating, mainly because of corrosive water (about 25%) in the transported fluid, and that a replacement programme was only 60% complete when Section 2 ruptured 'due to lack of funds'. World Bank
How?
The World Bank and the EBRD lent to the Russian Federation, which on-lent the funds to Komineft under a subsidiary loan agreement; Komineft paid an international management contractor, a pipeline contractor and a supervision consultant, and ran a social programme for affected villages. World Bank
In proportion The World Bank estimated the present value of shutting the pipeline down at some 15 times the cost of the project. World Bank
6 of 6 questions answered from the record

What happened

The record, in order.

Between February 1994 and January 1995 the Kharyaga–Usinsk oil pipeline in the Usinsk district of the Komi Republic failed repeatedly, with a cascade of failures in August and September 1994 and in January 1995, according to the World Bank. The pipeline had a history of spills starting in 1982. Oil was held in bogs, creeks and temporary dikes; in autumn 1994 some dikes failed and oil reached the Kolva River, which flows into the Usa, a tributary of the Pechora, which flows to the Barents Sea.

The World Bank said Komineft knew in 1992 that the pipeline's integrity was deteriorating, mainly because of corrosive water (about 25%) in the transported fluid, and that a replacement programme was only 60% complete when Section 2 ruptured 'due to lack of funds'. The Christian Science Monitor reported that two leaks were noticed on 12 August 1994 and that pumping continued at full pressure until 6 September; heavy rain on 27 September (Oil & Gas Journal: 1 October) overtopped or washed out dams. The Komi Republic Emergency Situation Commission declared an emergency in the Kolva River area on 10 October 1994.

Estimates of the volume of oil released differ widely between the World Bank ('in excess of 100,000 tons', with 'over 20,000 tons' into the Kolva), Komineft (84,000 to 102,200 barrels in two press accounts), other Russian officials, a US Deputy Energy Secretary and a local environmental movement; estimates of the contaminated area differ as well. The pipeline carried up to 11 million tons of oil a year, and the World Bank judged that shutting it down was not feasible.

The Russian Prime Minister asked the World Bank for emergency assistance on 23 January 1995. The Bank's Board approved a US$99 million IBRD loan on 25 April 1995 and a US$25 million EBRD loan was signed on 5 May 1995; both were made to the Russian Federation and on-lent to Komineft. Project cost at appraisal was US$140 million, including US$16 million from Komineft; actual cost was US$115 million. The project paid for an international management contractor, replacement of 64.2 km of pipe, spill containment and clean-up, and a social programme for affected villages.

Lukoil acquired Komineft in 1999. The EBRD loan closed on 31 December 1999 and the IBRD loan on 30 June 2002. Lukoil-Komi reclaimed 42.2 ha in 2000 and 33.7 ha in 2001. The World Bank's Operations Evaluation Department rated the outcome 'Satisfactory' in 2003. According to Lukoil, the 1994 accident area was released from 'environmental disaster zone' status in 2004.

  1. 1982The pipeline's history of spills begins (World Bank)
  2. 1994Leaks begin in February; two leaks noticed 12 August; heavy rain 27 September; Komi emergency declared 10 October
  3. 1995Russian Prime Minister requests assistance (23 Jan); management contractor chosen (13 Feb); World Bank memorandum (5 Apr); Board approval of loan 3872-RU (25 Apr); EBRD loan signed (5 May); Government Decree No. 629 approves the EBRD agreement (27 Jun)
  4. 1999Lukoil acquires Komineft; EBRD loan closes (31 Dec)
  5. 2002IBRD loan closes (30 Jun); 237 of 270 ha reclaimed by May according to Komineft figures
  6. 2003World Bank evaluation rates the outcome 'Satisfactory' (28 Apr)
  7. 20041994 accident area released from 'environmental disaster zone' status (Lukoil)

What was said

Claims, in the words of those who made them.

“By April or May of next year, all the pollution will be cleaned up”

“Everything is under control now”

“This event is nothing out of the ordinary”

“This is potentially a very dangerous accident for the environment”

“must have been tens of thousands of tons, not hundreds of thousands”

“Whether it be 100,000 bbl or 2 million bbl, that's a lot of oil.”

William White, US Deputy Energy Secretary, as quoted by Oil & Gas Journal · October 1994 · Oil & Gas Journal

“what are our cows going to eat in the meantime?”

“They have leaks all the time, and they have been concealing it for a long time”

“long-standing resentment about Komineft's pattern of behavior”

World Bank completion report, describing the views of villagers · 2002 · World Bank

“a potential environmental disaster was avoided”

“no provision was made for the accumulated effects of a long history of previous oil spills, leaving the local communities with a residue of grievances.”

“LUKOIL volunteered to eliminate its consequences.”

Lukoil press release · 14 November 2005 · LUKOIL

Where accounts differ

Each party's account, side by side, with its source. The record does not settle these points; it shows them.

How much oil was released in 1994?
International bodies
World Bank (1995 memorandum, 2002 completion report)

'In excess of 100,000 tons (730,000 barrels)' cumulatively; 'over 20,000 tons' into the Kolva River.

World Bank
Company or project
Komineft, via Oil & Gas Journal (31 October 1994)

102,200 barrels.

Oil & Gas Journal
Company or project
Komineft officials, via the Christian Science Monitor (31 October 1994)

84,000 barrels escaped; tens, possibly hundreds, of thousands of barrels also soaked into the tundra.

The Christian Science Monitor
Company or project
Komineft spokesman Valery Ilyin, via the Christian Science Monitor (28 October 1994)

3.6 million gallons.

The Christian Science Monitor
Government and regulators
'Other Russian officials', via Oil & Gas Journal

219,000–438,000 barrels.

Oil & Gas Journal
Government and regulators
William White, US Deputy Energy Secretary

Up to 80 million gallons, as told to the New York Times (via the Christian Science Monitor, 28 October 1994); he also passed on '2 million bbl' from American oil companies in the area (Oil & Gas Journal).

The Christian Science Monitor
Communities and civil society
Ivan Khudyakov, Movement to Save the Pechora (Usinsk branch)

Tens of thousands of tons, not hundreds of thousands, based on pipe capacity.

The Christian Science Monitor
Communities and civil society
Bellona (2007), citing the newspaper Tribuna

The 'official version' was 100,000–120,000 tonnes.

Bellona
How large was the contaminated area?
Government and regulators
Ministry of Emergency Situations, via the Christian Science Monitor

26 square miles of tundra soaked.

The Christian Science Monitor
Company or project
Komineft data, via the World Bank completion report

270.4 hectares contaminated and damaged.

World Bank
Communities and civil society
Bellona (2007)

'Official estimates' of 115 hectares were 'strongly underestimated'; more than 400 hectares were cleansed over four years; Lukoil's 1999 inventory found 750 hectares still needing remediation.

Bellona
How serious was the accident, and how soon would it be cleaned up?
Government and regulators
Energy Ministry spokesman

'This event is nothing out of the ordinary.'

The Christian Science Monitor
Government and regulators
Environment Ministry press chief

'This is potentially a very dangerous accident for the environment.'

The Christian Science Monitor
Company or project
Komineft president (October 1994)

All the pollution would be cleaned up by April or May 1995.

The Christian Science Monitor
International bodies
World Bank completion report (2002)

By May 2002, 237 of 270 ha had been reclaimed according to Komineft figures; 33 ha were left for 2002–2003.

World Bank
Did the social mitigation programme meet the villages' needs?
International bodies
World Bank

Programme of US$4.53 million, of which US$3.95 million was committed, spent on fodder and calves, drinking-water wells, medical and laboratory equipment, food supplements for children under 2, summer stays for children and a school and kindergartens; the evaluation says the small socio-economic rehabilitation programme 'did not make much headway'.

World Bank
Communities and civil society
Villagers, as reported in the World Bank completion report

'In general, dissatisfied' with the programme; felt 'a lack of transparency'.

World Bank

How it looked

What was shown, beside what was recorded.

Shown

  • Komineft told the Christian Science Monitor that 84,000 barrels escaped.
    Komineft officials · The Christian Science Monitor
  • Komineft's president said all the pollution would be cleaned up by April or May 1995.
  • The Energy Ministry's spokesman called the event 'nothing out of the ordinary'; the Environment Ministry's press chief called it 'potentially a very dangerous accident for the environment'.
    Russian ministries · The Christian Science Monitor
  • Lukoil said it 'volunteered to eliminate' the consequences of the 1994 accident.
    Lukoil (2005) · LUKOIL
  • The evaluation rated the outcome 'Satisfactory' and said 'a potential environmental disaster was avoided'.
    World Bank Operations Evaluation Department · World Bank Operations Evaluation Department

Recorded

  • World Bank: oil released 'in excess of 100,000 tons (730,000 barrels)' cumulatively, of which 'over 20,000 tons' reached the Kolva River.
  • Komineft data cited by the World Bank: 270.4 hectares contaminated and damaged; by 1 September 1999, 161.79 ha reclaimed; by May 2002, 237 of 270 ha reclaimed with 33 ha left for 2002–2003; about 40,000 cubic metres of sludge still in containment polygons in 2002.
  • The World Bank completion report said burning of peat bogs 'just drove the oil further down', that moving oily peat into sand pits increased the number of areas needing eventual clean-up, and that most areas resisted microbial degradation.
  • Financing plan at appraisal: World Bank US$99 million, EBRD US$25 million, Komineft US$16 million; the EBRD disbursed US$17.5 million because it could extend the loan only about one year beyond the original closing date.
  • Social mitigation programme for affected villages: US$4.53 million, of which US$3.95 million was committed (World Bank US$2.82 million, EBRD US$0.70 million, Komineft US$0.43 million); villagers were 'in general, dissatisfied' with it.
  • World Bank evaluation: a baseline study prepared in 1995 'was not followed up' and a subsequent report was delayed until late 2001; the small socio-economic rehabilitation programme 'did not make much headway'.
  • A 'financial dispute between the consultant and Komineft' delayed the environmental monitoring report until late 2001.
  • Items listed as not yet financed included an integrated data sensing and control system estimated at about US$15 million.
  • The World Bank estimated the present value of shutting the pipeline down at some 15 times the cost of the project, and the financial rate of return to the pipeline company at over 30% on a transport price of US$3.75 per ton.
  • In October 1994 local environmentalists told the Monitor they could not judge Komineft's figure because snow covered the site; a Fuel and Energy Ministry ecology head told the Monitor he did not know the size of the accident until the information appeared in the Western press.
  • Decree No. 629 states that repayment of the EBRD loan 'will be made from the funds of JSC Komineft' (translated).

Who gained

Money that reached nature, beside money that stayed elsewhere.

Reached nature or the ground

Not published
Spill containment and clean-up, EBRD-financed payments$9.1m
From the borrower's report in the World Bank completion report; part of US$17.5m in EBRD-financed payments.
Lukoil-Komi land reclamation, 2000 (42.2 ha)—
Window: 2000
RUB 32 million, under Lukoil-Komi's self-financed corporate programme.
Lukoil-Komi land reclamation, 2001 (33.7 ha)—
Window: 2001
RUB 12 million, under the same programme.

Gained elsewhere

Not totalled
IBRD loan to the Russian Federation, on-lent to Komineft$99m
Window: 1995–2002
US$98.41m disbursed.
EBRD loan to the Russian Federation, on-lent to Komineft$25m
Window: 1995–1999
US$17.5m disbursed.
Komineft contribution in the financing plan$16m
Window: 1995
Russian government advance for the management contractor's mobilisation$12m
Window: 1995
Pipeline section replacement, EBRD-financed payments$5.5m
Social mitigation programme for affected villages$4.53m
US$3.95m committed.
Project cost at appraisal$140m
Window: 1995
Actual project cost: US$115m.
Currency: USD · Window: Mixed — see each line. Figures cover different periods and are not compared as a ratio. * Estimate built from cited figures.

Responses on record

  • komineft (October 1994): Its president said in October 1994 that all pollution would be cleaned up by April or May 1995; its spokesman said everything was under control; officials gave a figure of 84,000 barrels escaped. · The Christian Science Monitor
  • lukoil (2005-11-14): Said it started working in the Komi Republic five years after the 1994 accident and 'volunteered to eliminate its consequences'; reported 4.6 billion rubles spent on environmental activities in Komi in 2000–2005, 1,592.75 ha returned to land users and 878.7 km of pipelines replaced (all activities in the republic). · LUKOIL
  • ibrd (2003-04-28): Its evaluation department rated the outcome 'Satisfactory' and said sustainability was 'Highly Likely' because of Lukoil's backing. · World Bank Operations Evaluation Department

In court and with insurers

Every proceeding and every insurer decision on record.

Lawsuits and rulings

No court case on record. No court has ruled on this case.

Insurers

No insurer decision on record.

What nature saw

Outcomes measured on the ground, and nature's note.

Nature's report opens this page. Below: further outcomes measured on the ground.

Oil released into the Kolva River
Over 20,000 tons
World Bank; its estimate of the cumulative release was in excess of 100,000 tons
Volume estimates
Differ widely
Komineft officials gave 84,000 barrels; the US Deputy Energy Secretary passed on 2 million barrels
Land reclaimed by May 2002
237 of 270 ha
Komineft figures in the World Bank completion report; 33 ha left for 2002–2003
Loans disbursed
US$98.41m + US$17.5m
World Bank and EBRD, lent to the Russian Federation and on-lent to Komineft

What we don't know

Undisclosed, unproven, untried: recorded as data.

Nature

  • Disputed How much oil was released in 1994?
  • Disputed How large was the contaminated area?
  • Disputed How serious was the accident, and how soon would it be cleaned up?

Money

  • None on record Lukoil-Komi land reclamation, 2000 (42.2 ha) — RUB 32 million, under Lukoil-Komi's self-financed corporate programme.
  • None on record Lukoil-Komi land reclamation, 2001 (33.7 ha) — RUB 12 million, under the same programme.

Accounts

  • Disputed Did the social mitigation programme meet the villages' needs?

Record

  • Disputed Insufficient: no measured final volume of oil is given in the World Bank documents, the press reports or the Bellona chapter; estimates differ (see disputes).
  • Unclear Unclear: the pipeline is called the Kharyaga–Usinsk pipeline by the World Bank (146 km in the 1995 memorandum, 148 km in the completion report), the Vozei-GOSP pipeline by Lukoil and the Vozey-Golovnie pipeline by Bellona; whether these are one line or sections of it is not stated.
  • Disputed Figures differ: the World Bank gives pipe diameters of 325 mm (Section 1) and 530 mm (Section 2); Bellona gives 720 mm.
  • Insufficient Insufficient: Bellona's reports of declines in fish and birds and of metals in food name no measuring body or data series.
  • Insufficient Insufficient: in October 1994 local environmentalists told the Christian Science Monitor they could not judge Komineft's figure because snow covered the site.
  • Insufficient Insufficient: the World Bank's evaluation says a 1995 baseline study was not followed up and a later report was delayed until late 2001.

Did the harm stop?

The World Bank dates the leaks from February 1994 to January 1995. Containment, replacement of 64.2 km of pipe and reclamation followed from 1995; by May 2002, 237 of 270 ha were reported reclaimed and 33 ha remained.

Who paid?

The World Bank (US$98.41m disbursed) and the EBRD (US$17.5m) lent the money to the Russian Federation, which on-lent it to Komineft; Decree No. 629 says EBRD repayment would come from Komineft's funds. Lukoil financed further reclamation from 2000 under its own corporate programme.

Sources

Voices on record: ✓ Company or project✓ Government and regulators— Courts✓ Press and investigations✓ Communities and civil society— Researchers✓ International bodies

Company or project

Press and investigations

Communities and civil society

Connected cases

Related matters, and cases linked to this one through the same organisations, with the role each played in both.

Science and environment

Groundwater
Water held underground in soil and rock, drawn through wells.
Hectare (ha)
A unit of area equal to 10,000 square metres, about 2.5 acres. 100 hectares make one square kilometre.

Places and local terms

Pastoralists
People whose livelihoods depend on moving livestock between grazing lands.

Carbon and conservation finance

Baseline
The projected scenario of what would have happened without a project, such as an expected rate of deforestation. Credits are issued for the difference between the baseline and what actually happened, so an inflated baseline produces more credits.