30 Years - The Era of Independence
Ravil Cherdabayev: «My whole life is saturated with oil»

Ravil Cherdabayev is a legendary and unique personality, a bright representative of the famous Cherdabayev family – one of the founders of the oil industry of Kazakhstan. In his life, he happened to work as a locksmith, chief engineer, director of a production enterprise and minister, mayor, diplomat, and deputy. The main thing remained the same – he always worked with oil. No, not just worked – he lived oil. The history of his life is inseparable from the history of Independent Kazakhstan.
– Mr. Cherdabayev, the collapse of the Soviet Union – where and how did you meet it?
– Since August 1990, I have worked as Deputy Chairman of the Guryev Regional Executive Committee (now it is the Atyrau region). In this position, I supervised the fuel and energy complex issues, industry, transport, and others. Since the beginning of 1992, he was appointed First Deputy Head of the regional administration. The news of the USSR's collapse I met at the Tengiz oil and gas field, where meetings were constantly held with general directors and subcontractors, representatives of ministries, and departments of the USSR.
It was a difficult time. We did not miss a single issue of the "Vremya" TV program, newspaper news, full of sensational reports. Events in Belovezhskaya Pushcha, the State Emergency Committee, speeches by leaders of parties and movements, fateful decisions of the parliament and statements by heads of state on secession from the USSR, and much more. And no matter how much we discussed or made various forecasts for the future, the news of the collapse of the Soviet Union came as a complete surprise, since everyone had the hope that the Union would change on some conditions but still maintain its integrity. Anxiety settled in my soul for the Fatherland, for its future outside the Union, in which our country has been for about 70 years.
Fifteen independent states appeared on the world map. Each of them began to build a life on their own. Conditions at the customs, tariffs for transport passing through the borders of countries, prices for goods, and much more changed. All the well-established interstate and interdepartmental ties that ensured the passage of goods and financial resources were interrupted.
– Was it only this break in economic ties that caused the country's oil and gas industry to collapse economically in a matter of months in 1991-92? In 1991, by the time of the collapse of the Union, Kazakhstan was producing 26 million tons of oil. This volume was restored only in 1999. What is the reason for this situation, and due to what, in your opinion, was it possible to rectify the situation?
– The main reasons were precisely in the collapse of the USSR. Firstly, during the entire existence of the Soviet government, the oil industry of Kazakhstan was controlled entirely by Moscow since we did not have our own Ministry of oil and gas. All issues, ranging from financing, design, establishment, and operation of enterprises, logistics, planning and reporting, and ending with the appointment of senior personnel, were resolved by the Union ministries. Having lost the governing body overnight, it was necessary to create own national coordinating body quickly, establish a supply and demand scheme and produce products, and all this took time.
Secondly, all work on the design, supply of equipment, spare parts, materials, and research studies stopped due to the reasons mentioned above, as they were carried out by enterprises from all republics of the USSR and some from abroad. It took time to re-conclude agreements with independent states that had seceded from the USSR and with foreign countries. All these new contractual relations were already based on the international currency – US dollars, which the government did not have at that time.
Thirdly, large oil and gas fields discovered in the 70-80s, such as Tengiz, Korolevskoye, Karachaganak, fields on the shelf of the Caspian Sea and others, due to the depth of occurrence from 4 to 7 kilometers, high reservoir pressure up to 900 atmospheres and above, high sulfur content in its composition, and high outlet temperatures exceeding 100 degrees Celsius, required the purchase of appropriate equipment and the latest technologies that were not available in the Soviet Union at that time. All the equipment used in the old fields was worn out and could not meet the increasing demands of the time.
In the first years after Kazakhstan gained independence, the situation was critical in the oil and gas industry and all other sectors of the national economy. Describing the country's economy at that time, the first president Nursultan Nazarbayev said that it was in a "comatose state." It was urgent to find a way out. The only competitive and in-demand product produced by Kazakhstan at that time was oil. A bet was made on it to attract investment.
But here, too, great difficulties awaited us. Firstly, there was no appropriate legislative framework guaranteeing the return of the invested capital to the investor with a profit. Secondly, no relevant body had experience working with investors, which would ensure the fulfillment of all conditions, starting from the writing of agreements on establishing joint ventures, ensuring their functioning, and ending with the sale of products. Thirdly, no specialists knew foreign languages in business, the latest technologies, and experience in negotiations.

The first foreign investor was the Chevron Oil Corporation, one of the world's top three leading oil companies. Based on the signed agreements, the Kazakh-American joint venture Tengizchevroil was established on April 6, 1993, and this became a kind of signal for other investors. With the participation of major oil investors, consortia Kazakhstankaspiyshelf, Karachaganak Petroleum Operating, and others were created. They all believed the first President of Kazakhstan. The flow of investments has had a positive impact on other sectors of the economy. Active work with investors, the introduction of the latest equipment and technologies, joint production management, training of local personnel have yielded positive results. Now the country produces more than three times more oil than in Soviet times, and I think this is just the beginning.
– You, working at Tengizneftegaz, and then, as the first Director of the joint venture Tengizchevroil, participated in negotiations on the creation of TCO. Was it easy for Kazakhstan to have this first experience of cooperation with a foreign investor? What impression do you have of the negotiation process? What are moments from this process remembered the most?
– First of all, Russia claimed such oil fields as Tengiz, Karachaganak, the fields of the Caspian shelf, and some others after the collapse of the USSR, so it was necessary to solve this delicate issue. Secondly, for the above reasons, it was essential to convince the investor to agree to our terms since Chevron wanted to insist on the signing conditions agreed on the eve of the collapse of the USSR with the leadership of the Union. It counted on creating a joint Soviet-American enterprise to develop the Tengiz and Korolevskoye fields and the transfer of 23 thousand square kilometers to a joint venture for 50 years. Thirdly, investors demanded guarantees from the government, as they invested several billion US dollars in the project.
All this was preceded by a long and thorough work of the commissions created at the national and departmental levels. Hundreds of complex negotiations took place. Sometimes it came to such disputes that it seemed that a breach of relations was inevitable since the project was being created, as they said at the time, "the largest in the 20th century." Representatives of two previously different economic and political systems sat down at the negotiating table. After resolving all issues taking into account the interests of our state at the highest level, the work of the enterprise began. On April 6, 1993, the agreement on the establishment of the Tengizchevroil joint venture was officially signed. By the decree of the President of the country, I was appointed the first Director from the Kazakhstani side. Working days have begun.
We immediately set the following conditions: compliance with the laws of our state, attracting up to 85-90 percent of local personnel as their qualifications meet international requirements, language, and professional training, establishing a decent salary, solving all social issues, such as housing, free travel, food, medical care, etc. And most importantly, as the Head of State instructed when appointing me Director of the Tengizchevroil joint venture, it was necessary to create appropriate conditions for the accelerated adaptation of foreign specialists in our difficult climatic, social, and political conditions since the attention of the entire world community was focused on this project.
Almost three decades have passed since the creation of the Tengizchevroil joint venture, and we can proudly say that the team of the first company in Kazakhstan with the participation of foreigners is the most exemplary not only in our country but also in the world.
– In June 1993, you headed the newly created Ministry of Oil and Gas Industry. How justified was its allocation from the Ministry of Fuel and Energy? After all, later, during the subsequent reorganization of the government, the Ministry of Oil and Gas Industry and the Ministry of Energy and Coal Industry were again merged into one – the Ministry of Energy and Mineral Resources.
– In the first years of the independent state creation, the management structure administrative reform issue was acute. The number of regions and districts was revised, ministries and departments arose, based on the tasks that required solutions and the creation of appropriate coordinating bodies.
At the time of the Ministry of Oil and Gas Industry creation, all enterprises related to prospecting, drilling, production, refining, transportation, and research work were state-owned. And since the oil sector of the economy was the Achilles heel of the state's economy, it was necessary to engage more actively in its reform to comply with the country's future development programs. With the development of state programs, fundamental laws, and changes in the oil and gas sector ownership, there was no need for a separate ministry.
– Do you remember how your first working day as a minister began?
– The first working day in the new post began with participation in a meeting of the Cabinet of Ministers chaired by Sergei Tereshchenko. The issue of ensuring the harvest of 1994 was discussed. It was the middle of June, and the atmosphere at the meeting seemed much hotter than outside. Everyone, without exception, starting from the heads of the regions and ending with the Minister of Agriculture, spoke about the catastrophic shortage of fuels and lubricants, firstly, due to their insufficient production, and secondly, due to the lack of funds in farms to pay for fuel and lubricants.
In response to the question I was asked, I explained the situation and informed them about our planned measures. After the meeting, I arranged with Tereshchenko and left for the region where the oil and gas industry enterprises were located. During the week, I flew around Pavlodar, South Kazakhstan, Kyzylorda, and four western regions of Kazakhstan, got acquainted with enterprises, met with collectives, held meetings in all local administrations, visited and saw the vast expanses of grown bread. On the spot, all issues with the allocation of fuel were resolved. And I must say, the harvest that year was excellent, and everything was collected on time.
– What steps could you take to your asset as a minister?

– All strategic steps of the minister of any government are primarily conditioned by implementing the state program developed by the government and approved by the head of state and the parliament. The role of the Minister is to take the initiative, make timely proposals developed in the department entrusted to him, and actively implement them.
The period of my work as minister was a time of searching for ways to reform the oil and gas sector, creating multinational companies with a foreign presence, attracting investments, approving joint projects, conducting a lot of negotiations at home and abroad, ensuring uninterrupted and efficient operation of the industry and many other matters and concerns.
From the very first days, a working group was created from highly qualified oil specialists, which created a model for the development of the oil and gas industry for the next ten years, based on the state development program of the country. These and other actions were dictated by the tasks facing each ministry at that time.
– While working as a minister, you also continued to engage in implementing the Tengiz project actively. I remember that at that time, the issue of delivering Tengiz oil to world markets was acute…
– Yes, you are right, the main problem that had to be solved was the issue of exporting the extracted oil. The unresolved issue hindered the development of the field. There were times when, due to the lack of a quota for pumping oil through pipelines of Russia, we actively transported Tengiz oil in tanks by rail.
But the issue of oil pipelines had to be solved. Tengiz oil has a high content of mercaptan, which is environmentally harmful. In the end, we decided to purify oil from mercaptans and put into operation two demercaptanization units worth 168 million dollars each. Thus, the problem was solved, and the Russian side lifted restrictions on oil intake into the Atyrau-Samara pipeline.
After that, it was decided to build a new Tengiz-Novorossiysk export oil pipeline. Scrupulous negotiations on the creation of the Caspian Pipeline Consortium took place with my participation. Oman categorically did not want to include Chevron in the consortium being created. Russia supported this request. We came to London for negotiations, and other participants put pressure on me to sign that Kazakhstan is also against the entry of Chevron into the project. How can we be against it if Chevron has the main volumes of oil? What will we fill the new pipeline with?
As soon as I was appointed minister, I immediately wrote a letter to the Russian side with several problematic issues hindering the development of the Tengiz project, and a letter was sent to Moscow signed by then Prime Minister Sergei Tereshchenko. I didn't get an answer. That's why I told my Russian colleague in London – first give me the answer to our questions!
As a result, an alliance was created in the pipeline consortium. Kazakhstan, Russia, Oman took 50 percent of the shares, and the remaining 50 percent was divided among several producing companies operating in Kazakhstan and Russia, first of all, of course, Chevron. That's it, the problems with transportation have been resolved. The Caspian Pipeline Consortium is working, its capacities have been expanded, and it can deliver to world markets all volumes of Tengiz oil that will be produced in the future. And even Kashagan oil, whose production volumes are also constantly growing.
– You are the author of the book "Oil: yesterday, today, tomorrow." This is a large-scale encyclopedic study of Kazakhstan's oil production and refining industry. How was the idea born, and the work on the book did proceed?
– I've wanted to write a book like this for a long time. I collected literature from different countries, materials, and articles and wrote down something in essays and small notes. As a result, a whole library was formed from the collected literature, and entire chapters of the future book began to originate from the records. But I had catastrophically not enough free time to do a completed study. And finally, the perfect opportunity presented itself to put everything together and write.
As for the impetus for writing the book, throughout my entire career in the oil field and public service, I felt a shortage of such a book that would tell young specialists in an accessible language about the history of their native industry, about its role in the development of the oil industry of the planet.
The oil industry is the locomotive of Kazakhstan's economy. It has more than a century-old history of origin and formation, about which sometimes little is known to young citizens of Kazakhstan. In addition, I think people should know well the history of oil production not only in their native land but also in the world, especially today, when our country is one of the key players in providing the planet with hydrocarbon resources, plays a vital role in maintaining the energy balance in the region. It is time for Kazakhstan to take its well-deserved place in the information field, among the world's famous oil producers.
– In the preface, you call the book an attempt to answer the question: "What is oil?". Having finished working on the book and given it to the readers, are you ready to answer this question? What exactly is oil in the life of mankind and your life personally?
– To answer the question "What is oil?" is impossible within the framework of one book and even more so within the framework of one interview. In short, oil is a lot that is not visible to our eye, but if you look closely, it becomes clear – this is almost everything that surrounds us, starting with ballpoint pens and ending with fuel for cars and airplanes. And these are only petrochemicals. Oil is the "black gold", which has become another international currency, the "blood" of the world economy. This is what you need to read between the lines in the words of politicians of the past and present. As history shows, oil is also a big test.
Oil in my life is, first of all, the most challenging work, which I witnessed in early childhood. I saw my father and his brothers working hard in the oil fields. Then, at the age of 16, I went to work at a repair plant in Dossor. I received an oil specialty at the Gubkin Moscow Institute of Petrochemical and Gas Industry and returned to production. Even when I later worked in Komsomol and party bodies, my work went side by side with oil, and I had to solve many problems in the oil sector to deal with the social disorder of the oil workers' life.
Since 1987, I have been closely engaged in production as an engineer, and I directly participated in the development of the Tengiz field. Later, as you already know, I headed Tengizchevroil, the Ministry of Oil and Gas Industry of independent Kazakhstan. Therefore, I can say with confidence that my whole life has been saturated with oil. Oil for me, as for all Kazakhstanis, is the wealth that nature has generously endowed our blessed land, the key to the prosperity of our young state.
Oleg Chervinskiy conducted the interview