PROSPECTS FOR SOVIET OIL PRODUCTION A SUPPLEMENTAL ANLAYSIS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP08S01350R000602120003-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 35
• Document Creation Date: December 22, 2016
• Document Release Date: March 28, 2012
• Sequence Number: 3
• Publication Date: July 1, 1977
• Content Type: REPORT

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Prospects for Soviet Oil Production
A Supplemental Analysis
ER 77-10425
July 1977
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Prospects for Soviet Oil Production
A Supplemental Analysis
Central Intelligence Agency
Directorate of Intelligence
July 1977
Overview
This report is a compilation of some of the data and analysis employed
in the recent CIA study on the Soviet oil industry. The study concluded
that Soviet oil production will soon peak, possibly as early as next year
and certainly not later than the early 1980s. The maximum output reached
is likely to be between 11 and 12 million barrels per day (b/d)-up from
the 1976 level of 10.4 million b/d. Maximum levels are not likely to be
maintained for long, however.
The Soviet Government is certainly aware of problems in increasing
and sustaining oil production. Its own analysis emphasizes that the costs
of finding and developing oil are rising dramatically. The Soviets apparently
believe that they can avoid the downturn we predict. We disagree. We believe
that even though great efforts will provide them with considerable oil, they
cannot prevent the downturn.
Soviet efforts to solve the oil problem are reflected in the rapid increase
in purchases of oil equipment abroad. Since 1971, Soviet orders for Western
oil and gas equipment have totaled about $3.1 billion. An additional $4
billion worth of steel pipe has been bought. Plans to convert the giant
Samotlor field as well as smaller West Siberian fields to gas-lift production
could sharply escalate Soviet equipment purchases. The Samotlor project
alone would require at least $1 billion in imported equipment.
Imported equipment can only slow the rate of decline in oil production
once it begins. In large measure this reflects the deeply rooted nature of
the oil problem. The forced-draft approach to achieving production targets,
for example, has been expensive in terms of exploration and of recovery
rates in producing fields. As a result, proved reserves have stagnated since
the early 1970s, and no large finds have been made since the Samotlor
Note: This memorandum provides a supplemental analysis for the CIA
publication Prospects for Soviet Oil Production, April 1977, Unclassified.
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field was located in 1965: Only by working this field harder than any other
major oilfield in the world have the Soviets been able to come close to
their production targets.
At this point the Soviet Union has opted to continue its past approach.
Any shift to exploration drilling would entail drilling fewer production wells
and an immediate and sharp fall-off in current production. Indeed, the
pressure to focus more heavily on development drilling will intensify because
of the large capacity additions needed to offset depletion of old oil fields
and to provide for planned increases in production. By the Soviets' own
calculations, depletion offsets alone in 1976-80 will equal total capacity
additions during 1971-75. To add the capacity needed to meet 1980
production goals, the Soviets will have to increase their rate of development
drilling 50 percent between 1976 and 1980.
The Soviets are examining a variety of techniques to forestall the
production decline. The prospects of such methods having more than an
insignificant impact during the time period of our analysis are negligible,
however. Soviet production practices make it difficult to implement tertiary
recovery procedures, because their massive water flood techniques adversely
affect oil-reservoir permeability. Given the widespread damage inflicted on
major oil reservoirs, the Soviets will find it difficult to increase recovery
rates more than a few percentage points over the long term with tertiary
methods.
The difficulties the Soviets face on the oil front do not stem from
any lack of resource commitment on their part. Indeed, measured by the
resource cost in terms of material and manpower, the USSR may expend
as much effort on producing oil as all Free World countries combined.
Because of the low productivity of this effort, however, the results are
only a fraction of those in the West. For example, US firms drilled five
times as much meterage as did the Soviet Oil Ministry with about the same
number of rigs. For 1976, the Soviet Oil Ministry required some 800,000
employees to produce 10.4 million b/d of oil.
Plans and Plan Fulfillment
From World War II until the early 1970s, the Soviet record in oil
production was enviable. Plan production goals were consistently met or
exceeded at only a small cost in additional effort. Production in 1970 was
350 million tons (7 million b/d), more than nine times the 38 million tons
(760,000 b/d) output of 1950. This great increase in production was
accomplished without anything like a commensurate increase in inputs. Over
the 20-year period, the amount of drilling rose only about 210 percent
and the number of rigs in active use only 57 percent, from 1,119 to 1,760.
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This rapid growth in oil industry productivity was made possible only
by the discovery of extremely rich and accessible oil deposits in the
Urals-Volga region, where output grew from 5 million tons (100,000 b/d)
in 1950 to 210 million tons (4.2 million b/d) in 1970. During 1937-55,
the Soviets found and developed several of the world's largest and richest
fields in this region. Two of them--Romashkino and Arlan-contained as
much recoverable oil (19 billion barrels or 2.5 billion tons) as the combined
total of the 10 largest fields ever discovered in the lower 48 states of the
United States. At its peak in 1970, Romashkino produced 82 million tons
(1.63 million b/d), 23 percent of total Soviet output in that year. Since
that time, Romashkino's output has been maintained at about 80 million
tons (1.6 million b/d).
Since the mid-1950s the size of discoveries in the Urals-Volga has fallen
off sharply. Growth in output from this region slowed dramatically in the
early 1970s, as all of the large fields found in the 1940s and 1950s had
been fully developed.
During 1972-75 original output goals were not met. In 1975, despite
the largest absolute annual increase in oil production (including gas
condensate) ever achieved, total Soviet oil output fell short of the original
target by about 14 million tons (280,000 b/d), or 2.8 percent. The average
annual rate of growth rate in oil production planned for 197 1-75 was 7.4
percent, but the actual growth rate was only 6.8 percent. The four-year
trend of underfulfillment apparently continued in 1976 with a slight
shortfall, although detailed data have not been reported.
During this period of oil production shortfalls, several of the older
producing regions-the Ukraine, North Caucasus, and Azerbaydzhan--
registered declines in output, and production in the Urals-Volga levelled off.
Only by overfulfilling production goals in West Siberia was the USSR able to
come close to the national targets during 1972-75. Original plans called for
West Siberia to produce 120-125 million tons (2.4-2.5 million b/d) in 1975;
actual output was 148 million tons, almost 3 million b/d.
A large share of the overfulfillment in West Siberia was provided by
the rapid development of the Samotlor field. This giant field, roughly
comparable in size to Romashkino, has accounted for 24-26 million tons
(480,000-520,000 b/d) of the 30-million-ton-per-year (600,000 b/d) annual
increase in national production during the past four years. In 1976, Samotlor
produced 110 million tons (2.2 million b/d), nearly 35 percent more'than
Romashkino's greatest annual output. It is scheduled to peak at 130 million
tons (2.6 million b/d) in 1977-78, and no new fields even remotely
comparable in size have been discovered to maintain production increases.
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Crude Oil
Crude OR and Gas Condensate
Million
Tons
Million
b/d
Million
Tons
Million
b/d
1971
Plan
371
7.42
N.A.
N.A.
Actual
371.8
7.44
377.1
7.54
1972
Plan
395
7.90
N.A.
N.A.
Actual
393.8
7.88
400.4
8.01
1973
Plan
429
8.58
N.A.
N.A.
Actual
421.4
8.43
429.0
8.58
1974
Plan
461
9.22
N.A.
N.A.
Actual
450.6
9.01
458.9
9.18
1975
Plan
496
9.92
5 05
10.10
Actual
481.8
9.64
490.8
9.82
1976
Plan
510.6
10.21
520.6
10.41
Actual
N.A.
N.A.
519.7
10.39
1977
Plan
N.A.
N.A.
550
11.0
Projected
540-5 50
10.8-11.0
1980
Plan
N.A.
N.A.
640
12.8
Projected
550-600
11-12
For the next decade at least, any growth in output, including that needed
to offset declines in older fields (including Samotlor after 1980), must come
from many smaller West Siberian fields.
The 1976-80 plan, as originally proposed, called for oil production
to reach 620-640 million tons (12.4-12.8 million b/d) in 1980. West Siberia's
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USSR: Oil Production Plans and Fulfillment
7.42
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goal-300-310 million tons (6.0-6.2 million b/d)--is almost half of that for
total national output in 1980. Despite increasingly apparent problems in
the oil industry-oil fields approaching exhaustion, inadequate exploration
drilling, no new giant discoveries since Samotlor in 1965, and growing need
for modern Western exploration and production equipment and
technology-the 1980 goal was cited as 640 million tons (12.8 million b/d)
in October 1976 by the Deputy Chairman of the Council of Ministers.
Why this goal was set at the upper end of the original range, when
the many difficulties confronting the industry would seem to dictate a lower
figure, remains a mystery. Perhaps the hierarchy believes that the higher
goal will spur the oil industry to greater efforts. At any rate, for the reasons
stated in the discussion of regional production, it seems unlikely that the
goal can be attained.
The Soviets recognize that long-range prospects for oil production have
dimmed during the past decade. In 1967, Soviet sources projected oil
production in the year 2000 at 1-1.15 billion tons (20-23 million b/d).
In 1977, a high-level Soviet economist stated that projections for oil
production at the end of the century have been scaled down to 800-900
million tons (16-18 million b/d). This reduction probably was prompted
in part by a reassessment of available oil reserves and in part by difficult
production and transport problems in the regions from which future
production growth must come.
Oil Production and Development of Fields
Throughout its history the Soviet petroleum industry has depended
heavily on a single region-in some cases on a single large field such as
Romashkino or Samotlor--for growth in production. From World War II
through 1970, the increase in Soviet oil output came first from the old
fields around the Caspian Sea (near Baku in Azerbaydzhan SSR), and
beginning in the 1950s, from large fields in the Tatar and Bashkir ASSRs
and in Kuybyshev Oblast of the Urals-Volga region. Since 1970, nearly all
output growth has come from West Siberia, primarily from the giant
Samotlor field. Thus far, no new large successor has been found to ensure
future growth.
The Impending Decline of the Urals-Volga
The Urals-Volga region still is the leading producer of oil in the USSR
but will be surpassed by West Siberia in 1977 or 1978. In the mid-1960s
the Urals-Volga accounted for about 70 percent of total Soviet oil output.
Major fields in this region have been producing for more than 25 years
and are rapidly approaching depletion.
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USSR: Crude Oil' Production, by Region
Million barrels per day
Region
1965
1970
1971
1972
1973
1974
1975
19762
Total USSR
4.86
7.06
7.54
8.01
8.58
9.18
9.82
10.39
Western region and Urals
4.51
5.80
5.90
5.97
5.98
5.97
6.00
5.89
Urals-Volga
3.48
4.17
4.23
4.31
4.40
4.44
4.50
4.48
Tatar
1.53
2.01
2.02
2.04
2.06
2.07
2.07'
2.05
Bashkir
0.88
0.81
0.80
0.80
0.81
0.80
0.81
0.80
Kuybyshev
0.67
0.70
0.71
0.71
0.71
0.70
0.69
0.67
Perm'
0.20
0.32
0.34
0.36
0.39
0.41
0.44
0.46
Orenburg
0.05
0.15
0.17
0.19
0.21
0.23
0.24
0.25
Lower Volga
0.12
0.14
0.15
0.15
0.15
0.14
0.14
0.14
Udmurt
0
0.01
0.01
0.03
0.04
0.05
0.07
0.08
Saratov
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
Komi
0.04
0.11
0.12
0.13
0.13
0.14
0.14
0.17
Belorussia
Negl
0.08
0.11
0.12
0.14
0.16
0.16
0.17
North Caucasus
0.41
0.68
0.72
0.69
0.59
0.53
0.47
0.40
Azerbaydzhan
0.43
0.40
0.38
0.37
0.36
0.36
0.34
0.33
Ukraine
0.15
0.27
0.28
0.28
0.27
0.25
0.23
0.23
Other3
Negl
0.09
0.06
0.07
0.09
0.09
0.16
0.11
Eastern region
0.35
1.26
1.64
2.04
2.60
3.21
3.82
4.50
West Siberia
0.02
0.63
0.90
1.25
1.75
2.33
2.96
3.63
Central Asia
0.28
0.58
0.66
0.71
0.76
0.79
0.81
0.80
Mangyshlak
0.04
0.21
0.26
0.30
0.34
0.38
0.40
0.40
Emba
Negl
0.05
0.06
0.06
0.06
0.07
0.07
0.07
Turkmen
0.19
0.29
0.31
0.32
0.32
0.31
0.31
0.30
Other
0.05
0.03
0.03
0.03
0.03
0.03
0.03
0.03
Sakhalin
0.05
0.05
0.05
0.05
0.05
0.05
0.04
0.04
Other3
Negl
0.05
0.03
0.03
0.04
0.04
0.01
0.03
1. Including gas condensate.
2. Preliminary estimate.
3. Chiefly gas condensate produced by the Ministry of the Gas Industry.
Waterflooding has been used since the initiation of production in most
of these fields--as is common practice in the USSR-to maintain and/or
increase formation pressure and to increase well flows. In a number of fields,
large volumes of water have been injected at high pressures, damaging
reservoirs and reducing the amount of recoverable oil. In the mid-1960s
the water cut in total fluid recovery began to rise substantially and use
of pumps became necessary to increase fluid flow and to maintain oil
output. In the late 1960s output began to decline in Bashkir and threatened
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to do likewise in the other parts of the Urals-Volga. In 1971, however,
the US removed trade controls on high-capacity submersible pumps, and
since then the USSR has imported from US firms 1,000 pumps with a
total fluid lifting capacity of more than 3 million b/d. These pumps
stabilized oil production in the Urals-Volga, but, as the water cut in total
fluid increases, oil production will decline unless there is a comparable
increase in the capacity of fluid lifting equipment. Such an increase in lifting
capacity seems unlikely, given competing demands on the limited capacity
of equipment producers.
In some newer producing areas of the Urals-Volga, such as Orenburg
and Udmurt, oil output will rise, but not nearly enough to offset the
probable decline in the large, older fields. Optimistically, output in the three
major producing areas of the Urals-Volga--Tatar, Bashkir, and
Kuybyshev--will fall by only the 36 million tons (720,000 b/d) called for
in the 1980 plan when compared with 1975. Depending upon how fast
the water cut rises, Urals-Volga production in 1980 probably will range
somewhere between 175 and 200 million tons (3.5 and 4 million b/d)
compared with 225 million tons (4.5 million b/d) in 1975.
The Tatar SSR accounts for roughly half of the oil output of the
Urals-Volga region. Despite the development of many small fields in the
past decade, about 80 million tons (1.6 million b/d) of the total output
of about 105 million tons (2.1 million b/d) comes from the supergiant
Romashkino field. Water injection in this field has been increasing steadily,
reaching a total of almost 150 million tons (3 million b/d) in 1975. As
a result, the total volume of fluid that must be lifted to produce any given
quantity of oil has also been increasing. The average oil output per producing
well declined from almost 23,000 tons (460 b/d) in 1970 to roughly 10,000
tons (208 b/d) in 1975. Over the past eight years production from the
field has been maintained at a constant level by in-fill drilling and narrow
spacing of producing and injection wells combined with the use of
surfactants and other chemicals in conjunction with waterflooding.
The Rise of West Siberia
Since the early 1970s the bulk of the increase in crude oil production
has come from West Siberia, where commercial output began in 1964.
Sizable production increases were expected from the oilfields in the
Mangyshlak Peninsula in western Kazakhstan, but output there has not risen
nearly as fast as anticipated because of improper waterflooding procedures
and complicated drilling problems.
West Siberia is crucial to the Soviet effort to continue raising oil
output. All of the increase in Soviet production planned for 1980 is to
come from West Siberia, where output is to rise from almost 150 million
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Million b/d
3r-
USSR: Crude Oil Production, by Major Field
PERM
I I I I
1969 1970 1971 1972
'including gas condensate.
2 Estimated.
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USSR: Distribution of Crude Oil Production'
1970
WESTERN REGION
57%
43%
Urals-Volga
43%
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tons (3 million b/d) in 1975 to 300-310 million tons (6.0-6.2 million b/d)
in 1980. This goal is considerably higher than an earlier target of 230-260
million tons (4.6-5.2 million b/d). During 1977-80, increases in oil
production will depend on rapidly developing many smaller new fields while
maintaining peak output at the Samotlor field. Available Soviet data on
West Siberian oilfields scheduled for production by 1980 indicate that
maximum regional production would approximate 290 million tons to (5.8
million b/d) if all fields were to reach their maximums at the same time.
However, some of West Siberian fields have already peaked and are now
on the decline; others will peak before or after 1980. The Shaim fields,
which began production in 1964, are well past their peak and have water
cuts exceeding 50 percent. Ust-Balyk, the second largest West Siberian field,
is also declining, but development of a new producing zone may prolong
its life.
Although new fields are being discovered in West Siberia, no giant
fields have been found comparable to Samotlor, which has a production
capacity of about 130 million tons (2.6 million b/d) that probably will
be reached in 1977-78. Present development plans call for Samotlor to
maintain maximum output for four years. These plans, however, depend
on the use of high-capacity submersible pumps and on drilling a large
number of additional wells to maintain production at its maximum.
In general, West Siberian fields appear-to respond poorly to production
techniques that worked well in the Urals-Volga region. At Romashkino,
it took 18 years before the water cut rose to 10 percent; at Samotlor this
share of water in total fluid produced was reached in about 3 years. In
the Urals-Volga, submersible pumps last up to a year without service; at
Samotlor, because of silt and salt in the oil and water, they must be replaced
after only 60 days of operation. In recent months the USSR has begun
to negotiate with US and other Western firms to undertake an extensive
gas-lift program to cope with rising fluid lifting requirements and to extend
the producing life of the Samotlor field.
The ambitious plans for West Siberia in 1980 do not appear attainable
because of the extensive drilling that will be required-30 million meters
during 1976-80 compared with 9.5 million in 197 1-75--and the need to
place six to eight new oil deposits in production each year of the current
five-year plan. West Siberian oil production in 1980 is more likely to be
on the order of 250-260 million tons (5.0 to 5.2 million b/d) rather than
the 300-310 million tons (6.0-6.2 million b/d) planned.
Frontier Zones for Oil Production
Geological conditions favorable to large future discoveries of oil exist
over much of the Arctic offshore regions (Barents, Kara, East Siberian, and
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Chukchi Sea basins), in the East Siberian lowlands, in deep structures in
the Caspian Sea, and perhaps off Kamchatka and Sakhalin in the Sea of
Okhotsk. Production from most of these areas, however, is at least a decade
away. The technology to cope with pack ice such as will be encountered
in the offshore Arctic seas has not been developed as yet, even in the West.
Thus, development of these areas is unlikely before the end of the 1980s
at the earliest.
Operating conditions are more favorable in the East Siberian lowlands
than in Arctic offshore areas, but the severe climate, extensive permafrost,
great distance from energy consuming centers in the western USSR, and
difficult transport problems will restrict the pace of development when oil
is found. To date no commercial-scale discoveries of oil have been made.
In the offshore area around Sakhalin, Japanese firms are working on
a cooperative venture with the Soviets to explore for and develop oil
deposits. The exploration program is at least one year behind schedule,
and potential oil production does not appear to be as promising as the
Soviets originally estimated. Weather and ice conditions in this area are
harsher than in the North Sea, where development of commercial-scale
production took about 10 years. Significant production from the Sakhalin
area is unlikely before the mid-1980s.
Soviet Production Methods
Over the past 20 years the Soviet Union has consistently claimed that,
because of advanced practices, it recovers a much higher percentage of the
original oil in place than does the United States or other Western oil
producing countries. The Soviets attribute their high recovery rates to their
production practices, especially the early employment of high-pressure water
injection. Now that many of the Soviet fields have been in production for
20 years or more, it is becoming apparent to them that recovery will be
much less than originally estimated. In the Urals-Volga area, for example,
Soviet engineers cut their recovery estimates from 5 1 percent in 1960 to
44 percent in 1970. Further revisions downward probably will be made.
Water-Injection Pressure Maintenance
The most important Soviet oil production technique in recent years
has been the widespread use of water injection to maintain a rapid flow
of oil through the reservoir to the producing wells. Since World War II,
the Soviets have begun water injection in new fields soon after oil
production starts and continue the practice throughout the life of these
fields. Water-injected fields accounted for more than half the oil produced
in the USSR as early as 1955, more than 66 percent in 1960, and more
than 80 percent in 1976.
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The water-injection program has enabled the Soviets to minimize their
initial oil field investment. By using forced water injection they can obtain
a much higher initial level of output per well than would be possible under
Western practice. The higher output per well means that, at least initially,
the Soviets need fewer producing wells to achieve a given level of output.
In some fields the Soviets have used water flooding to raise the pressure
in the reservoir enough to make the oil flow to the surface when it otherwise
would not. This practice also temporarily eliminates the need for costly
pumping equipment.
While these practices yield high production rates in the early years
of an oil field's life, problems develop as the fields age. Injected water
breaks through the oil-bearing formations into the producing wells. When
this happens, additional wells must be drilled (in-fill drilling) to locate the
oil, or expensive pumps must be installed to lift the large volumes of fluid
(water and oil) needed to maintain oil production.
Soviet reservoir engineers first used this approach to waterflooding in
1948 at Tuimazy in the Bashkir ASSR. Water was injected not only along
the edges of the oil pool but also through interior rows of injector wells
that paralleled and crisscrossed the field. Since 1967, a thin network of
wells located on 100 hectare blocks has been used for most new field
development. The water volumes injected often exceed the void space of
the oil produced, and the injection pressures raise normal formation
pressures.
In recent years, submersible (Reda-type) centrifugal high-volume pumps
have been used to maintain the oil flow from water-injected fields. Although
oil is quickly removed from highly permeable rock as the waterflood sweeps
through, considerable amounts of oil are left behind in less permeable
"pillars." The use of submersible pumps combined with water injection
eventually causes coning, i.e., fingers of water break through to the
producing wells, bypassing much oil.
When the water cut of the fluid produced from the original network
of wells becomes excessive, the field usually has to be redrilled. Smaller
well spacing patterns of 50 hectares, 25 hectares, 12 hectares, and six
hectares are used for each successive development stage. The Romashkino
field has been redrilled four times, and in each phase a smaller well spacing
pattern was used to capture the bypassed oil.
The total impact of these practices on oil recovery in the larger
Urals-Volga and West Siberian fields before 1974 cannot be fully assessed
because of limited data. In 1974, however, several prominent Soviet leaders
and reservoir experts admitted that many mistakes were made at Tuimazy
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and at numerous other fields where the same exploitation methods were
applied. These fields were not uniform in terms of porosity, permeability,
and rock composition, and the Soviet engineers were late to recognize the
importance of these factors in designing waterflood operations. As a
consequence much oil has been lost. Soviet methods definitely led to
premature coning and water break-throughs at Samotlor in 1972 and at
six or seven other large West Siberian fields. How much of the decline
in expected recovery rates stems from this kind of damage is uncertain;
the original estimates for recovery appeared overly optimistic even with
ideal reservoir management.
Failure to treat ground water and surface water used in most
waterflood projects has also created reservoir problems. Bottom-hole
temperatures and the oil recovery factors were lowered by injecting cold
surface water into the Uzen-Zhetibay reservoirs of the Mangyshlak Peninsula,
as well as those at Samotlor and Ust Balyk in West Siberia. Injection of
untreated water has led to excessive salt formation in well bores and
downhole pumping equipment in West Siberia. Organic material and
dissolved gases in untreated surface waters injected into hot oil reservoirs
has also caused prolific bacteria growth that reduces rock porosity.
Oil Recovery
In the 1950s and early 1960s, Soviet engineers believed that their
practices would result in much higher recovery rates than were prevalent
in the West. As late as 1960 they still believed that they would recover
nearly 50 percent of the original oil in place in the Urals-Volga region.
These beliefs are now in question.
The average rate of recovery in the US remains at 32-33 percent,
despite great improvements in technology and equipment in recent years.
Soviet planners apparently began to question planned recovery factors after
the Oil Ministry requested increased imports of US technology and
equipment after 197 1.
In 1974, N. K. Baibakov, V. D. Shashin, A. P. Krilov, and other ranking
officials spoke out on the oil recovery problem underscoring that "it lies
at the heart of the reserve issue." A Soviet study on changing oil recovery
rates for A+B+C1 reserves in 1960-70 noted that the average annual rate
of decline in the expected recovery factor was four-tenths of a percentage
point during 1960-65, but it increased sharply to nine-tenths of a percentage
point during 1966-70. The Soviets now admit that many large fields,
including Samotlor, will not reach their planned recovery rates.
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Some Soviet analysts ascribe the problems to a poor understanding
of the reservoirs at the time development plans are made. Poor seismic
and well-logging equipment often prohibits the collection of good data.
Similarly, the amount of damage from water breakthroughs in the largest
reservoirs is not known precisely even by the Soviets; scattered published
data suggest that they perceive the problem to be very widespread and
increasing. Water production accounted for almost 50 percent of total fluid
output in 1975, according to several Soviet sources.
A. P. Krilov stated in 1974 that extension of the basic development
plan pioneered at Tuimazy in 1948 to other fields was affecting these
deposits in the later stages of their development. Several problems
experienced at Tuimazy reoccurred at Romashkino, which is now producing
55.5 percent water, as well as at several Kuybyshev and West Siberian fields.
Tuimazy is now producing 86 percent water from the main Devonian zones.
According to the originator of the development plan, Tuimazy was not
developed in the best possible way.
Another Soviet expert raised the point that 1970 crude oil production
of 348 million tons (7 million b/d) was accompanied by 273 million tons
of water (5 million b/d)--i.e., a 43 percent water cut. By 1974, the
nationwide average water cut exceeded 47.3 percent, and the water ratio
is expected to increase rapidly due to the age of most of the largest fields.
Other experts indicate that water breakthrough between the seventh and
11th years of oil production increases the water cut from 15 percent to
30 percent at younger deposits. These observations were probably based
on experience in West Siberia. Other sources note that the Shaim deposits,
with stable oil production of 5.6 million tons annually (110,000 b/d) since
1972, were 46 percent water cut after 9 years of exploitation.
A 1972 study of 102 wells in certain Samotlor zones showed water
cuts of 12 to 14 percent; the water production was attributed to coning
and not to bad cement jobs as had been suspected. Water appeared in oil
production soon after waterflooding began at the Shaim, Surgut, and
Nizhnevartovsk fields of West Siberia-the only major fields opened since
1965.
A table in a Soviet study notes water produced in all the major
producing regions of the USSR in 1961 and 1965.
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USSR: Regional Production of Water
as a Percent of Liquids Recovered
Region
Urals-Volga
11.5
24.0
Trans Caucasus
77.0
75.0
North Caucasus
56.4
48.8
Ukraine
17.5
12.0
Central Asia and
Kazakhstan
73.8
77.2
Average (presumably
weighted)
43.0
44.0
More recent statements of the water problem appeared in 1974-75
with water production estimated at 43.8 percent in 1970, 47.3 percent
in 1974, and 46.4 percent in 1975. These statements appear inconsistent
with the earlier data. The age of the fields, the advanced state of depletion,
and Soviet studies indicating that 80 percent of the oil is recovered in 18
years at the larger Urals-Volga fields suggest that the water problem is much
greater than the above figures indicate.
The Soviets are receiving temporary relief by redrilling most fields two
to four times using closer well spacing. Since new wells initially produce
largely oil, this has the effect of reducing the average water cut for the
entire field. For example, at Romashkino, the central sector of the field
produced 80 percent water in 1968-69. Altogether Romashkino has been
redrilled four times, which reduced the water cut to as low as 48 percent
in the early 1970s. The average water cut, however, is once again rising,
reaching approximately 55 percent in 1976.
Fluid Production and Pumping Requirements
Realization of 1980 production goals of 300-310 million tons (6-6.2
million b/d) in West Siberia is critical to meeting the national target of
640 million tons (12.8 million b/d). Nationwide, the production of water
was roughly equal to total oil recovery in 1975. In-fill drilling both at the
old depleted fields of the Urals-Volga and at the newer West Siberian fields
is requiring an increasing share of the total Soviet drilling effort. In 1976,
10 million meters of the 12 million drilled by the Soviet Oil Ministry were
allocated to development wells. Limitation on the Soviet ability to drill
new wells means that total fluid lifting requirements will nearly double
over the current five-year plan. Producing anything near 600 million tons
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(12 million b/d) of oil in 1980 with only a 3 percentage point annual
increase in the water ratio implies an annual increment approaching 200
million tons (4 million b/d) of fluid in absolute terms in 1976-80. With
a 6 percentage point rise, annual increments in fluid lifting would reach
roughly 400 million tons (8 million b/d).
The primary Soviet strategy for dealing with increasing water cuts is
the use of electric submersible pumps. The total Soviet inventory of these
pumps on 1 January 1975 was 11,950, of which 8,700 were in service
and the remainder were undergoing repair or in reserve. These pumps
accounted for 200 million tons (4 million b/d) or nearly 40 percent of
total oil output in 1976. To meet plan goals for output in the Urals-Volga,
a great increase in the number of pumps will be required. A recent article
said that 470-500 new pumps would be needed each year in Bashkir ASSR
just to stabilize output.
USSR: Planned Crude Oil Production
and Estimated Total Fluid Output
Million
Tons
Million
b/d
Million
Tons
Million
b/d
Million
Tons
Million
b/d
1975
491
9.8
491
9.8
982
19.6
1976
520
10.4
586
11.7
1,106
22.1
1977
550
11.0
700
14.0
1,250
25.0
1978
580
11.6
834
16.7
1,414
28.3
1979
610
12.2
995
19.9
1,605
32.1
1980
640
12.8
1,188
23.8
1,828
36.6
1975
491
9.8
491
9.8
982
19.6
1976
520
10.4
662
13.2
1,182
23.6
1977
550
11.0
897
17.9
1,447
28.9
1978
580
11.6
1,233
24.7
1,813
36.3
1979
610
12.2
1,736
34.7
2,346
46.9
1980
640
12.8
2,560
51.2
3,200
64.0
Case A assumes 50 percent oil and 50 percent water in 1975 and water cut increases 3 percentage
points annually.
Case B assumes 50 percent oil and 50 percent water in 1975 and water cut increases 6 percentage
points annually.
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In May 1975, the Soviets noted that electric submersible downhole
pumps provided the chief means of automating oil production at Samotlor.
This article also made reference to the use of imported high-volume US-made
Reda and BJ pumps, which lift up to 1,000 tons (7,300 barrels) of fluid
per day. About 1,025 US pumps have been delivered and about 1,210 will
have been shipped by yearend 1977, on the basis of present orders.
Approximately 2,000 of these pumps are made each year in the West, all
in the US, and delivery to the USSR presently is restricted to about 30
pumps per month because of limited capacity, backorders, and long lead
times. Present Soviet-made submersible pumps have lower capacities and
require more maintenance than their US counterparts.
Soviet reports indicate that the operating life of many of the Reda
type pumps now in use at Samotlor is as short as 60 to 90 days. The
high maintenance required on pumps used at Samotlor is due to the presence
of fine silt and sand grains in the oil, salt formation on the pumps, lack
of heat-resistant electric cable, and frequent power outages that burn out
the motors.
Last year, the Oil Ministry, in a major change in production policy,
decided to adopt gas-lift development at Samotlor and Federovo at a cost
of $600 million to $1.1 billion. Excessive maintenance costs may have
prompted the Soviets to acquire US gas-lift equipment as a substitute for
electric downhole pumps. Gas-lift units are cheaper to operate and much
easier to maintain with wire line tools from the surface. This is the largest
project of its kind in the world to date. Long lead times are expected,
however, before delivery can be made.
New Capacity and Drilling Requirements
To meet planned production targets the Soviet oil industry will have
to increase productive capacity sharply in the years ahead. Large capacity
additions will be needed to offset the sharply declining productivity of
existing wells. Still more new wells will be needed to provide for growth
in output. To achieve the necessary capacity additions, maintain maximum
output from existing fields, and discover and prove up new reserves will
require a massive increase in the Soviet drilling effort. Whether the industry
can meet these requirements is far from certain, given the present level
of Soviet drilling technology and practice.
Capacity Requirements
The major element causing the sharp rise in new capacity requirements
is the extremely rapid increase in new capacity needed to offset depletion
in older areas. During 1961-65, for example, the USSR required only 68
million tons (1.4 million b/d) of new capacity to offset depletion; by
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1971-75 they required nearly 260 million tons (5.2 million b/d). The plan
for 1976-80 anticipates that as much as 390-400 million tons (7.8-8 million
b/d) of new capacity will be required just for depletion offset. Developments
in Bashkir ASSR highlight the nature of the offset problem. The 1976-80
plan anticipates some decline in Bashkir output, currently 40 million tons
per year (800,000 b/d), and to moderate this decline the Baskhir Oil Trust
believes that it will need to add new capacity at the rate of 10-12 million
tons per year (200,000-240,000 b/d) during 1976-80.
Tatar ASSR, the largest oil producing region in the Urals-Volga, faces
a situation similar to that of Bashkir. In Tatar, during 1966-70, new capacity
was added at the rate of 10-12 million tons annually (200,000-240,000
b/d), and about half of the new capacity resulted in increased output. During
1971-75, Tatar added new capacity at the rate of 13-14 million tons per
year (260,000-280,000 b/d), but all of this new capacity went to offset
the depletion of old capacity. In 1976 output declined in Tatar for the
first time since production began. A simple extrapolation of trends over
the past 10 years suggests that capacity in Tatar will be depleted at the
rate of about 20 million tons per year (400,000 b/d) during the 1976-80
period.
The situation in Kuybyshev is quite similar. The problem of achieving
new capacity additions in all of these Urals-Volga regions is compounded
because the water cut is rising at an extremely rapid rate and the need
for lifting equipment is becoming critical. In a recent Pravda article the
Bashkir Oil Trust said that "simply to maintain a high level of output,"
it will be necessary to install 470-500 submersible pumps each year in
Bashkir alone. Without the pumps the drilling requirements for new capacity
would be much higher.
The sharp rise in the rate of capacity depletion has caught the USSR
by surprise, probably because of the unrealistically high oil recovery rates
they anticipated at older fields. In 1970, when the 1975 plan goals were
first announced, the Oil Ministry expected that only about 160 million
tons (3.2 million b/d) of new capacity would be required to offset depletion
during 1971-75. As the plan period progressed, they were forced to revise
this estimate four times, and by the time the plan was completed, 258
million tons (5.2 million b/d) of new capacity had been required to offset
depletion. Although actual new capacity additions far exceeded originally
planned levels (392 million tons vs 300 million tons or 7.8 million b/d
vs 6 million b/d), production fell 14 million tons (280,000 b/d) short of
the goal. The same thing appears to be happening now. In 1975, the Soviet
Oil Minister announced that 450 million tons (9 million b/d) of new capacity
would be needed during 1976-80 to produce 620-640 million tons
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(12.4-12.8 million b/d) of output. By mid-1976, this goal was revised
upward to 530-540 million tons (10.6-10.8 million b/d).
Although the USSR added more than 390 million tons (7.8 million
b/d) of new capacity during the 1971-75 period, it still fell short of its
original production goals. The shortfall was minimized thanks to the giant
new Samotlor field, where the Soviets were able to add more than 80 million
tons (1.6 million b/d) of new capacity. In doing so, however, they pushed
the field much harder and faster than originally planned. As late as 1973,
planned peak output at Samotlor had been only 100 million tons (2 million
b/d). Now the planned peak is to be reached in 1977/78 at 130 million
tons (2.6 million b/d). In any event, 60 percent of the increase in total
Soviet oil output of 138 million tons (2.8 million b/d) during 1971-75
came from Samotlor.
During 1976-80 Samotlor will provide a production increase of only
about 43 million tons (860,000 b/d), if it reaches output of 130 million
tons (2.6 million b/d) this year. To maintain Samotlor production at this
level, however, the USSR will have to greatly increase its drilling effort
there to offset the rapid rate of well depletion. Viewed in this way, every
new well at Samotlor after this year will be for depletion offset. During
1976-80 the Soviets will have to add new wells at a much higher rate (about
500 per year compared with 250 annually in 1970-75). Beyond 1980,
output at Samotlor will begin to decline despite increasing additions of
new capacity.
After 1977 all growth in Soviet output will have to come from a
number of much smaller fields in West Siberia, where well productivity
rates are lower than at Samotlor and where the task of providing
infrastructure will be much more difficult. If Soviet engineers attempt to
meet 1978 plan goals by pushing Samotlor's output higher than the
presently planned peak of 130 million tons (2.6 million b/d), production
from this field will almost certainly begin to slump before 1980. As it
is, Samotlor output this year will be 60 percent higher than the peak rate
achieved at Romashkino--a similar-sized field--where peak output levels were
maintained for nine years-1967 through 1975.
Drilling Requirements Escalate
The Soviet Oil Ministry is faced with steadily rising drilling
requirements. The dual needs of finding new reserves and adding new
producing capacity at existing fields to sustain planned rates of output
growth have strained drilling capacity since the mid-1960s. Depletion of
existing reserves meant that more and more rigs had to be allocated to
development drilling so that new wells in old fields could help compensate
for declining output per well. During this period, exploratory drilling
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stagnated. Now, not only are development drilling requirements continuing
to rise rapidly, but exploratory drilling must be increased sharply to locate
and prove up reserves to support production in the 1980s. By that time,
output in the old Urals-Volga fields will be falling rapidly, and production
at Samotlor and other major West Siberian fields will have begun to decline.
At the same time, however, the limitations of Soviet drilling equipment
are becoming increasingly apparent. As long as most Soviet drilling was
at shallow depths, evolutionary improvements in turbo-drill design allowed
steady improvements in rig productivity. Between 1946 and 1960, when
most exploration was occurring in the Urals-Volga regions, exploratory rigs
were able to improve their monthly average drilling speeds from less than
180 meters per rig per month in 1946 to 400 in 1960.. In development
drilling they did still better, going from 370 meters per rig per month in
1946 to more than 1,100 by the late 1960s.
With the move to West Siberia and the need to drill to greater depths
in nearly all regions in the USSR, commercial drilling speed of exploratory
rigs has fallen by 15 percent since 1960. The same indicator for rigs engaged
in shallower development drilling has continued to rise, however. The Soviets
have been working on improved versions of the turbo-drill that they claim
will allow them to drill efficiently at depths of up to 3,500 meters. We
doubt that this can be done unless the Soviets can make a quantum
improvement in the quality of their drilling bits and of the steel used for
rigs and drill pipe.
Because of the decline in rig productivity, the USSR will have to boost
its active rig park to meet future drilling needs. In fact, the decline in
the rig productivity should accelerate as a larger and larger share of total
drilling takes place in Siberia, where wells are substantially deeper than
in the old Urals-Volga fields and rig transport between wells is more costly
and time consuming.
No evidence is available, however, to show that the Soviets have
planned for or have the capacity to sharply boost their rig supply. As late
as 1976, Oil Minister Shashin said that, to meet 1980 plan goals, rig
productivity would have to rise by 42 percent during the plan period. Given
recent trends, this task appears to be nearly impossible. Even if the USSR
decided to massively reequip its drilling sector with Western equipment,
adequate supplies would not be available for many years, in part because
of order backlogs by Western buyers.
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Selected Data on Soviet Drilling Activity
Meters drilled'
Exploratory
Development
Wells completed
Exploratory
Development
(including
water injec-
tion wells)
Average well
depth
Exploratory
Development
Average cost
Exploratory
Development
Number of rigs
operating
Commercial drilling
speed
Exploratory
Development
1,003
3,534
4,763 6,740
9,261
10,972
15,116
383
1,449
2,540 3,200
4,752
4,604
5,418
620
2,085
2,223 3,540
4,509
6,368
9,698
950
2,893
3,320 3,892
4,903
5,311
6,0622
342
1,074
1,394 1,660
2,165
1,711
1,9352
608
1,819
1,926 2,232
2,738
3,600
4,1272
1,120
1,349
1,822 1,928
2,195
2,691
2,8002
1,020
1,146
1,154 1,586
1,647
1,769
2,3502
Rubles per Meter
87.6
118.2
124.0 111.9
148.7
238.8
2803
47.7
45.6
48.5 49.4
65.5
84.5
1003
430
1,119
852 1,130
1,624
1,760
1,8003
Meters per Rig per Month
177
209
306
401
377
337
3402
372
629
893
993
1,090
1,154
1,4502
1. These figures include drilling of all types: oil, gas, core holes (possibly for other minerals), and slim-hole
stratigraphic tests by the Geology Ministry.
2. Estimated, based on 1974 data.
3. Estimated.
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Drilling Plans
The Soviets plan to increase total drilling (presumably by the Oil
Ministry) to 75 million meters in 1976-80.* Drilling in West Siberia is to
increase from 9.5 million meters in 1971-75 to 30 million in 1976-80, a
formidable undertaking. The Oil Ministry drilled 52 million meters of
exploratory and development drilling in 1971-75, compared with a plan
goal of 56 million. Drilling by the Oil Ministry in 1976 totaled 12 million
meters; only 2 million were for exploration, while 10 million went for
development.
Drilling of more than 70 million meters in each five year plan since
1965 has been considered essential by planners, but this goal has never
been realized, mainly because of the failure of rig productivity to reach
planned levels. Plans for 1976-80 call for 30,000 well completions, compared
with 20,000 or so completions in 1971-75 and about 80,000 total well
completions since 1950.
Goals of the Soviets for total drilling and well completion can be
achieved only if they devote an even larger share of their drilling effort
to development drilling. Rigs engaged in development drilling are roughly
four times as productive as those used for exploration since depths are
less, less time is spent moving between locations, and support infrastructure
is better. If this shift continues, they may come closer to meeting plan
goals during 1977-80, but they will pay a high price in the early 1980s.
Meeting for both exploratory and development drilling goals would require
increasing the number of active rigs by nearly 50 percent.
Exploratory Drilling
To replace reserves scheduled to be produced during 1976-80, the
Soviets must find 21 billion barrels (2.9 billion tons), an amount that
exceeds estimated gross discoveries during 1971-75 by roughly 50 percent.
If production is to go on rising during the early 1980s, still more reserves
will have to be located and proved up. The Soviets must find the equivalent
of a new Samotlor or Prudhoe Bay field every two years or so.
Development Drilling
Soviet plans for 1976-80 call for 30,000 new producing well
completions nationwide. During 1976, the Oil Ministry completed 4,800
wells and added a reported 87 million tons (1.7 million b/d) of new capacity.
If the goal for new wells is to be reached, completions will have to average
6,300 per year during 1977-80 despite the increasing depth of the wells.
*In 1971-75, drilling of all types totaled 68 million meters. This figure includes both oil and gas
wells, as well as core drilling for other types of minerals and slim-hole stratigraphic testing by the
Geology Ministry.
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The meterage drilled for development wells will have to rise by at least
50 percent-to 15 million meters-to reach this goal by 1980. Average new
development well depths now run 2,350 meters; 30,000 well completions
would require 70 million meters of development drilling even if all wells
were successful. Given a success rate of about 90 percent, development
drilling alone would require nearly all of the drilling called for in the plan.
Soviet Oil Equipment Supplies
The Soviet effort to find and produce oil is already enormous. In terms
of material and manpower, the USSR probably expends as much or more
effort on producing drilling rigs, bits, and associated equipment than do
all the Free World countries combined. However, because of inferior quality
and design, the productivity of most Soviet equipment is quite low, and
the results obtained are only a fraction of those of the West. As a
consequence, imports of Western technology and equipment are becoming
increasingly necessary for the industry's growth. For the foreseeable future,
the USSR will have to rely on the West for much of the equipment and
know-how to realize its oil production potential, especially as exploration
and development requires deeper drilling or takes place offshore, in East
Siberia, or in the Arctic regions.
Soviet Oil Equipment
During most of the post war period the Soviet oilfield equipment
industry produced a range of equipment and supplies that allowed rapid
gains in oil output. The Soviet success was due in large part to the fact
that oil operations centered on development of large fields in the Urals-Volga
region where relatively shallow (2,000 meters or less) hard-rock formations
exist. Under these conditions Soviet turbo-drills worked reasonably well,
and most other equipment needs were met without great difficulty. This
situation persisted until the late 1960s. Since then, however, severe
weaknesses in the quality of Soviet oil equipment have become obvious
as exploration and development in other areas have taken place.
Manufacture of petroleum equipment in the USSR is concentrated in
some 40 plants under the All-Union Ministry of Chemical and Petroleum
Machine Building. At least one-third of the plants are located in the
Azerbaydzhan SSR near Baku, and they produce about two-thirds of all
Soviet oil and gas production equipment. In recent years equipment
manufacturers have been unable to keep pace with requirements, and the
situation is getting worse as oil production shifts to remote and physically
inhospitable regions where specialized equipment and technology are
required. Soviet officials have indicated that, without greater domestic
capacity to manufacture petroleum equipment, the 1980 oil production goal
cannot be met.
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Exploration Equipment
Frequent complaints appear in the Soviet press about the shortage of
high-quality exploration equipment. Most Soviet seismic recording is still
done on analog tape employing technology used in the US in the 1950s.
Good quality seismic geophones and cables are in short supply. Because
of the lack of good seismic data, the Soviets often cannot locate, identify,
and map structures at depths greater than 2,000 meters. Moreover, because
of poor recording data and a lack of digital processing units, mapping of
complex traps--both structural and stratigraphic--is extremely difficult for
Soviet geologists.
Drilling Equipment
The Soviets use three types of drilling equipment: turbo-drills, rotary
drills, and electric drills. About 80 percent of Soviet drilling rigs are turbo
rigs. The remainder are mostly rotary rigs roughly comparable with US
equipment produced in the 1940s and early 1950s. The third type of rig,
the electric drill, is essentially experimental. Although the Soviets have
extensively tested electric drills, technical problems have not been solved.
Despite the obvious shortage of drilling rigs, the Soviet rig park has remained
essentially unchanged at 1,800 deep well rigs. Although the Soviets claim
to produce up to 500 deep well rigs annually, this is inconsistent with
their own rig inventory data.
The down-hole turbines used by Soviet turbo-drill rigs also have a
relatively short life, typically only 600 hours. Because of the abrasion caused
by drilling fluids, turbine vanes are quickly worn. Bearings also wear out
rapidly from the harsh operating environment. Downhole turbines have three
sections used singly or in combination depending on the depth, the type
of material being drilled, and the required torque on the drill bit. In 1975
Soviet production of turbine sections was slightly less than 10,000, which
implies that each operating rig requires reequiping with new turbines every
six months.
Despite the demonstrated superiority of rotary drilling, the Soviets have
basically stayed with the turbo-drill approach. There may be practical
problems in making the shift in any case because rotary drilling would
require large volumes of high-strength steel pipe. In using turbo-drilling,
the Soviets are able to use their heavy-wall, poor quality drill pipe. Because
of the weight of the drill pipe and turbine sections, Soviet rigs must be
made much heavier than Western rigs. To reduce the weight of the drill
strings and allow deeper drilling, aluminum alloy drill pipe, although three
times as costly as steel pipe, is widely used in Soviet drilling operations.
The Kungur Engineering Works in the Urals manufactures about 80
percent of all the turbo-drills produced in the USSR. Soviet literature
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indicates that a new turbo-drill has been produced that features a low speed
and high torque rating. It includes a hydrodynamic jet braking system so
that turbo-drill speeds can be controlled for optimum results under most
drilling conditions. The Soviets claim that these improved turbo-drills can
drill efficiently at depths up to 3,500 meters. Unless Soviet rock bit quality
is greatly improved, however, this performance can not be readily achieved.
Indeed, most drilling time in deep holes is spent removing the drill pipe
in order to change bits, which last only a few hours. Soviet wells deeper
than 3,000 meters usually take more than a year to drill.
Rock Bits
The USSR manufactures an estimated 1 million rock bits of all types
annually, compared with only about 400,000 in the entire Western world.
The quality of Soviet bits is grossly inferior to those produced in the United
States. Soviet imports consist of high quality bits for deep drilling.
Pumps
The bulk of oilfield pumps are produced at petroleum machine building
plants in the vicinity of Baku. Although data are not available on output
of centrifugal, electric submersible pumps, the Soviets claim that about
11,000 such pumps are in operation in addition to those imported from
the US. The Soviet units are inferior to US-manufactured pumps in
efficiency, capacity, and service life. With the increasing volume of fluid
to be lifted from waterflooded fields, the Soviets will require more
high-capacity submersible pumps than they can produce and continued
imports from the US appear to be a necessity.
Large-Diameter Pipe
Soviet capacity for manufacturing large-diameter pipe has not kept pace
with demand. We estimate that during 1971-75 the USSR produced 11
million tons of large-diameter pipe (20 inches and larger), of which about
7 million tons were 40-inch diameter and larger. Total demand for
large-diameter pipe during this period approximated 17 million tons,
requiring 6 million tons of imports. Present plans call for construction of
36,500 kilometers of gas pipelines and 18,500 kilometers of oil pipelines
during 1976-80. Pipe production capacity is scheduled to rise by at least
one-third during the five-year period, but steel output is lagging and such
a rise will be difficult. Even if production rises by the planned percentage,
at least 4-5 million tons of pipe will have to be imported if the planned
pipelines are to be completed.
Production of large-diameter pipe is concentrated in five major plants;
the largest is at Chelyabinsk in the Urals. Most of the increase in pipeline
production capacity is to come from two new plants. One is being built
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at Vyksa in Gorkiy Oblast (Urals) to produce up to 2 million tons of pipe
up to 48 inches in diameter. A second is to be constructed in West Siberia
to produce pipe of 48-inch and 56-inch diameter.
Offshore Technology
The most obvious deficiency in Soviet equipment manufacture is the
lack of modern offshore technology. Although the USSR has produced oil
from offshore fields in the Caspian Sea for more than 20 years, most drilling
and production has been conducted from man made islands or fixed trestles
extending from the shore. At present the USSR has two modern and two
obsolete jack-up drilling platforms, all operating in the Caspian Sea. Plans
call for the number of mobile offshore platforms to reach 12 by 1980,
including at least two semisubmersibles. It is doubtful that this goal can
be reached; only three have been built in the past 10 years. The obsolete
jack-ups--the Apsheron and the Azerbaydzhan-can drill to depths of 1,800
meters and 3,000 meters, respectively, in no more than 20 meters of water.
The modern jack-ups include the Dutch built Khazar and the Soviet-built
Baky. Both rigs are rated for a maximum drilling depth of 6,000 meters
in about 60 meters of water. A new rig, similar to the Baky, is being
completed and should be ready for fitting out and testing this summer.
Imported Equipment
During 1972-76, Soviet orders of Western oil and gas equipment and
technology (excluding large-diameter line pipe) totaled about $3.1 billion.
The US domestic share was $550 million. US foreign subsidiaries provide
a large share of the remainder. The bulk of the orders were for pipeline
equipment, primarily for expansion of the gas pipeline network. Without
these imports the rapid growth of Soviet gas production would not have
been possible.
Soviet Orders from the US
1972-76
Total
550
Orenburg gas pipeline project
250
Other gas pipeline equipment
33
Submersible oil well pumps
148
Offshore equipment
40
Exploration and logging equipment
21
Oil pipeline equipment
21
Drilling equipment and drill bits
14
Refining equipment
9
Gas well completion equipment
8
Miscellaneous
6
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USSR: Orders of Western Oil and Gas Equipment'
7.77
FROM THE WEST
2,555.8
FROM THE
UNITED STATES
549.7
1 Excludes imports of large -diameter line pipe, which totaled an additional $4 billion during 1972-76.
28
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Imports of high-capacity, submersible oil well pumps from the US also
have been invaluable. During 1971-75, as the water cut in total fluid (oil
and water) recovery rose primarily because of extensive waterflooding, these
pumps increased fluid lift capacity to permit a rise in oil output of at
least 1 million b/d. Other important orders from the US, Japan, and Western
Europe include equipment for exploration, drilling, and refining.
The Soviets are aware that an extensive oil exploration program must
be implemented in permafrost areas of East Siberia, in offshore areas of
the Barents and Kara Seas, and in the deeper onshore formations of the
Caspian depression. Since Soviet geophysical equipment is inadequate for
this effort, seismic equipment and digital computerized recording units are
being bought from the West. Offshore technology and equipment are also
being sought in large amounts. Contracts have been placed with Western
firms for facilities to manufacture offshore oil drilling equipment for use
in deep water of the Caspian Sea, and negotiations are underway to buy
semisubmersible offshore platforms, subsea production equipment, and
drillships.
The largest order being negotiated at the present time is for gas-lift
equipment to improve the efficiency of oil production at the Samotlor and
Fedorov oilfields in West Siberia. This package, which is currently valued
at about $1 billion, includes automated surface equipment for collecting
gas and separating it from oil, compressors for pumping the gas back into
oil wells, and downhole equipment for monitoring the flow of compressed
gas at the bottom of the wells.
In addition to items already mentioned, the Soviet oil industry will
need to import the following:
(1) Rotary rigs, drill pipe, and casing. The domestic supply of drill
pipe and casing is not adequate in size, quantity, and quality required for
field development, especially in cold climates and under difficult conditions.
As the requirement to drill to greater depths increases, both onshore and
offshore, the USSR will have to shift increasingly to rotary rigs and
high-quality drill pipe, most of which will have to come from the West.
(2) Multiple completion equipment. As this type of equipment is
relatively scarce in the USSR, in many fields separate holes must be drilled
at a single site where separate 'producing zones exist. Multizone well
completions permit important economies in reduced drilling costs and
savings in casing.
(3) Secondary and tertiary recovery technology. The USSR is
preparing to undertake a high-priority program to increase yields from
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producing fields through intensive use of enhanced recovery techniques.
Technical agreements have been signed with US oil companies to assist in
this development. Soviet experience with enhanced recovery techniques is
very limited, although every major secondary and tertiary method has been
tried on an experimental or pilot plant basis.
Soviet Reserves of Crude Oil
The size of the USSR's reserves is uncertain because of definitional
problems as well as secrecy. Our estimate is that current Soviet proved
oil reserves are at the most 30-35 billion barrels (4.1-4.8 billion tons),
roughly comparable with those of the United States. Soviet proved reserves
have been relatively stagnant in recent years, and we see very little chance
that enough new oil will be discovered during the next few years to
appreciably improve the reserves-to-production ratio. Indeed, despite major
efforts, it will probably deteriorate.
Approach to Estimating Soviet Reserves
The Soviet Union has not published an oil reserve estimate since 1938.
In 1947 oil reserves officially became a state secret. Because of this secrecy,
we have had to develop indirect methods, based on fragmentary data in
the Soviet oil literature, for estimating Soviet reserves. Some insights into
Soviet oil reserves can also be obtained from natural gas reserve data.
Another technique is to determine Soviet oil reserves using the United States
as an analogue.
Soviet literature provides two basic types of data that can be used
to estimate crude oil reserves: the publication of periodic link relatives can
be used to chain bits of information from the past to the present, and
the reporting of ratios of reserves to production (R/P) will provide some
information about reserves when production figures are known. As an
example of the first type of reporting, one journal stated that explored
reserves of oil increased 1.7 times in the past 10 years (1961-70). An
example of the second type occurred when another journal reported that
the R/P on 1 January 1968 had declined from more than a 28-year supply
in 1966 to little more than an 18-year supply.
Reserve Definitions
An analysis of Soviet oil reserves is further complicated because, even
in the historical literature (before World War II), the Soviet reserves were
not comparable with those used in the West. Soviet definitions, unlike the
US proved and probable reserves concept, do not specify that the reserves
must be commercially exploitable with available technology and equipment.
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The Soviets have defined several categories of oil reserves, A, B, C 1,
C2, D1, and D2. Soviet reserves in category A can usually be considered
as reserves established through drilling, including undrilled areas enclosed
by producing wells. Category B reserves include those in undrilled areas
of a producing zone bounded by at least three producing wells but not
completely enclosed. Category C 1 reserves are those with at least two wells
in the producing zone. The other categories of reserves, C2, DI, and D2,
are simply inferred reserves not established by drilling.
We believe that proved reserves in the US sense correspond to the
Soviet A reserves plus some fraction of adjacent B reserves. The remainder
of the B reserves and some of the C 1 reserves would fall into the US category
of probable. Much of the remainder of the C 1 reserves fall into the US
possible category. Moreover, some portion of Soviet B and Cl reserves are
not exploitable with current technology and equipment.
The Size of Soviet Oil Reserves, 1946 to 1975
Our estimates of Soviet oil reserves are based on recently published
reserve growth indexes (link-relatives), which track Soviet oil reserves from
1947 through 1971, and two statements that indicate the reserve
developments for the period 1971 through 1975. According to Professor
Robert Campbell, the Soviet Union had 2.8 billion barrels (390 million tons)
of A and B reserves in 1946. Taking that figure as a base, he applied 'a
Soviet link relative published in 1969 to derive an estimate of 19 billion
barrels (2.6 billion tons) of oil in Soviet A and B reserves on 1 January
1961. A 1974 Soviet publication reported that reserves had grown by 63
percent (1.63 times) between 1 January 1961 and 1 January 1972. Applying
this growth factor to the 1961 estimate yields a 1972 estimate of 31 billion
barrels (4.2 billion tons).
To estimate Soviet A and B oil reserves on 1 January 1976, we have
again resorted to the recent Soviet literature. A 1975 planning index
published in a leading journal indicated that reserves would increase by
30 percent during the 1971-75 period. This would yield an estimate of
roughly 40 billion barrels (5.5 billion tons) for A and B reserves as of
1 January 1976. Of this amount, 33 billion barrels (4.5 billion tons) can
be considered reliable A reserves proved by drilling operations. We can verify
this from exploratory drilling discovery rates. During 1946-75, about 80
million meters of exploratory drilling for oil were reported by the Soviet
Oil Ministry. An estimated average finding rate of 130 tons per meter for
the 30 years would yield gross additions of 76 billion barrels (10.4 billion
tons). Subtracting cumulative production of 43 billion barrels (5.9 billion
tons) during 1946-75 leaves 33 billion barrels (4.5 billion tons) of remaining
A reserves at the start of 1976.
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The 33 billion barrels (4.5 billion tons) of Soviet A reserves plus a
small portion of the 7.3 billion barrels (1 billion tons) of B reserves roughly
corresponds to the US definition of proved reserves. The remainder of the
B reserves and some fraction of the C l reserves correspond to the US
definition of probable reserves. As a result, based on the literature, we
estimate Soviet proved oil reserves (US definitions) at between 30 and 35
billion barrels (4.1 to 4.8 billion tons) as of 1 January 1976 and that proved
and probable reserves would amount to about 40 billion barrels (5.5 billion
tons).
The US Reserve Analogue
Soviet oil reserves can also be calculated by using the United States
as an analogue. The Urals-Volga and other old producing regions are roughly
similar to the lower 48 states, particularly in that the combined output
of all regions except West Siberia stabilized at 340 million tons (6.8 million
b/d) in 1974 and 1975, and then declined in 1976. West Siberia, on the
other hand, is much like Alaska, in that in the years ahead growth in Siberian
output is expected not only to offset continued declines in other regions
but also to allow for substantial growth in output.
Based on a close comparison with the United States, Soviet proved
reserves outside of West Siberia probably total at most only 17-18 billion
barrels (2.3-2.5 billion tons) and could total only about 14 billion barrels
(1.9 billion tons). US output of 420 million tons (8.4 million b/d) in 1975
came from a working proved reserve base of only 23 billion barrels (3.2
billion tons).* Applying this reserve production ratio for US working
reserves (7.5) to Soviet output outside of West Siberia yields a working
reserve base of 18 billion barrels (2.5 billion tons) for all regions except
West Siberia. Because of the intensive exploitation of reserves, through
massive water flooding and use of high-lift pumps, the reserve production
ratio is probably only 5 or 6. The extremely rapid depletion rate of capacity
in these older fields tends to confirm use of a reserve/production ratio as
low as 6. On this basis, reserves outside of West Siberia would total only
about 14 billion barrels (1.9 billion tons).
West Siberian proved reserves probably total some 18-24 billion barrels
(2.5-3.3 billion tons). Remaining reserves in Samotlor range from 7.5 to
11 billion barrels (1-1.5 billion tons), depending on ultimate recovery rates.
Initial reserves of about 14-15 billion barrels (1.9-2.0 billion tons) were
calculated on the basis of recovery of 40 some percent of the original oil
in place. More recent information indicates that recovery will only reach
*Total proved reserves of 35.3 billion barrels (4.8 billion tons) in 1975 less 9.6 billion (1.5 billion
tons) for North Slope reserves and 2.5 billion (340 million tons) in Naval reserves and the Santa
Barbara Channel.
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some 26 percent, while the urgency of Soviet plans for gas-lift equipment
and the extremely rapid rise in water cut could mean recovery will be even
lower. Thus, our best estimate for remaining recoverable reserves at Samotlor
on 1 January 1977 is 7.5 billion barrels (1 billion tons), initial reserve
of about 11 billion barrels (1.5 billion tons) less cumulative production
off 3.1 billion barrels (425 million tons).
Using the same reserve production ratio for other producing West
Siberian fields as that at Samotlor (8 if average recovery is 26 percent and
12 if recovery reaches 36 percent), indicated reserves of 4-6 billion barrels
(550-820 million tons) remain to be exploited at other producing fields.
In addition to fields already in production in West Siberia, the USSR
has plans to develop a large number of smaller fields over the next four
years. According to their plans these fields are expected at their peak
development to add production of 90 million tons (1.8 million b/d). Using
an R/P of 12, the same as that for Samotlor's peak output vs initial
recoverable reserves, yields 8 billion barrels (1.1 billion tons) of additional
proved reserves not yet in production.
Conclusion
Use of the US analogue technique results in an estimate of total proved
reserves for the USSR of 33.5 billion barrels (4.5 billion tons) in 1976.
The estimate, on a regional basis, is as follows:
Billion Barrels
Billion Tons
Total
33.5
4.5
Old producing regions
14.0
1.9
West Siberia
19.5
2.6
Samotlor
7.5
1.0
Other producing fields
4.0
0.5
Proved nonproducing
8.0
1.1
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