DISCUSSION PAPER ON SOVIET PETROLEUM PRODUCTION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M00165A001700120027-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 63
• Document Creation Date: December 20, 2016
• Document Release Date: September 21, 2006
• Sequence Number: 27
• Publication Date: June 28, 1977
• Content Type: MF

0.11111111.1MIMENRIEL_
Avproved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
?Fr=vo FIcg54-si
4/9S9i
28 June. 1977
MEMORANDUM FOR: Director of Central Intelligence
FROM
SUBJECT
e 7
LguITEMY?Trrruc-cur?crr4 conomic Research
: Discussion Paper on Soviet Petroleum
Production
The attached unclassified paper was prepared for
our meeting with the Advisory Committee on East-West
Trade tomorrow at Commerce. One hundred copies will
be passed out at that time. At Herbert Hetu's request,
he has 125 copies, some of which'he will pass out in
advance of our meeting. I am sending copies to the
participants of your luncheon and a few other key
people in the energy business. The paper will also be
printed in a slightly more formal manner for dissem-
ination through DOCEX and the Intelligence Community.
This press run will be about 3500.
Attachment:
as stated
Distribution:
Orig - Addressee
1 - DDCI
1 - ER
1 - OD/OER
OD/OER/
(28 June '77)
STAT
STAT
TAT
I1OFd/CD Paaes 2
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For, Release 2006/09/21: CIA-RDP80M09165A001700120027-5
? II
A Discussion Paper
on Soviet Petroleum Production
Advisory Committee on East-West Trade
29 June 1977
June 1977
0165A001700120027-5
:14
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
? ? ? ?
I. 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 totalled 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
I-1
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027f5
? ? S.
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 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 Soviet's
own calculations, depletion offsets alone in 1976-80 will
equal total capacity additions during 1971-75. To add the
1-2
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
;-.
Approved For Release 2006/09/21 : CIA-RDP80M465A001700120027-5
?
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 5 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.
1-3
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
74
ciApproved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
? ? ?
II. 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 7
million b/d, more than 9 times the 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.
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 100,000 b/d in 1950 to 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) as the combined
total of the ten largest fields ever discovered in the
lower 48 states of the United States. At its peak in
1970, Romashkino produced 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 1.6
million b/d.
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-15
? III ? ?
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
The average
planned for
growth rate
million tons (280,000 b/d), or 2.8 percent.
annual rate
1971-75 was
of growth rate in oil production
7.4 percent, but the
was only 6.8 percent. The 4-year
actual
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
in output, and production in the Urals-Volga
off. Only by overfulfilling production goals
Siberia
targets
Siberia
b/d) in
declines
leveled
in West
was the USSR able to come close to the national
during 1972-75. Original plans called for West
to produce 120-125 million tons (2.4-2.5 million
1975; actual output was 148 million tons, almost
3 million b/d.
11-2
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
,
*
7,
pproved For Release 2006/09/21 : CIA-RDP80465A4700120027-5
? ?
USSR: Oil Production Plans and Fulfillment
Crude Oil Crude Oil and Gas Condensate
Million Million Million Million
Tons b/d Tons 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 9.92 505 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 11.0
1980
Plan N.A. N.A. 640 12.8
Projected 11-12
II- 3
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A00170012002715
? ? ?
USSR: Oil Production Plans and Fulfillment
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approvedor Re!, 2006/09/21: CIA-RDP801,165A1700120027-5
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 with
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
2.2 million b/d, nearly 35 percent more than Romashkino's
greatest annual output. It is scheduled to peak at 2.6
million b/d in 1977-78, and no new fields even remotely
comparable in size have been discovered to maintain
production increases. 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
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
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved Foileleaso006/09/21 : CIA-RDP80M004A00140120027t
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
2,000 at 1 billion-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.
11-6
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
?Approvedor Relir 2006/09/21: CIA-RDP801.654700120027-5
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 SSRs 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 insure 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.
11-7
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved Foiieleasir06/09/21 : CIA-RDP8OMOO?A0014/0120027?5
USSR: Crude Oi11 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
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
Neg,1
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
125
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
031
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.
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approvedor Reliie 2006/09/21: CIA-RDP8041654700120027-5
Water-flooding 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
In the late 1960s output began to decline in Bashkir
threatened 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
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.
output.
and
a
11-9
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For eleas4006/09/21 : CIA-RDP80M00iA00140120027!5
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 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 3.5 million
and 4 million b/d compared with 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 1.6 million
b/d of the total output of 2 million b/d comes from the
supergiant Romashkino field. Water injection in this
field has been increasing steadily, reaching a total of
almost 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 460
b/d in 1970 to about 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
11-10
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
-,pprovediFo" Relit 2006/09/21: CIA-RDP80M6165A0.700120027-5
surfactants and other chemicals in conjunction with
water flooding.
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 3 million
b/d in 1975 to 6.0-6.2
is considerably higher
million b/d in 1980. This goal
than an earlier
million b/d. During 1977-80, increases
will depend on rapidly developing many
target of 4.6-5.2
in oil production
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 5.8 million b/d if all
fields were to reach their maximums at the same time.
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved hor L880/00/2
. rsi A RnPAnM00165A001700120027-5
USSR: Crude Oil Pr?ctioney Major Field
Million b/d
4 ?
WESTERN REGION AND URALS
3
2
1
4
3
2
1
TATAR
?
BASHKIR
*Ms OMB 11.0???? giman.? Omm 4/1111.? UM% ii?INOMa Om. empoom IMMO 1.10.0??? ??????st emelmint
KUYBYSHEV
a
?
PERM
?
EASTERN REGION
...........
..
................
.......
0 14????...?
967 1968 1969 1970 1971 1972 1973 1974 1975 19762
1. Including gas condensate.
2. Estimated.
1965 1966 1
?
WEST SIBERIA
CENTRAL ASIA
11-12
450-080
A rint-rmari Frw Release 2006/09/21 CIA-RDP80M00165A00170012002/-
'ApprovedAir Relic 2006/09/21: CIA-RDP80416510700120027-5
USSR: Distribution of Crude Oil Production'
1970
Western Region 82% Eastern Region 18%
West
Siberia 917
Other 23%
Urals-Volga 59%
7.06 Million b/d
Other 9%,
1976
Western Region 57% Eastern 'Region 43%
10.39 million b/d
1. Including gas condensate.
I I ? 13
450-0 78
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved Foileleasii006/09/21 : CIA-RDP80M04A0014012002715
However, some 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 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
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved# Re!, 2006/09/21: CIA-RDP804654700120027-5
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 1971-75--and the need to place
6 to 8 new oil deposits in production each year of the
current 5-year plan. West Siberian oil production in 1980
is more likely to be on the order of 5.0 to 5.2 million
b/d rather than the 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 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 in unlikely
before the end of the 1980s at the earliest.
11-15
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For eleasii006/09/21 : CIA-RDP80M0011A0040120027z5
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.
Oil production from deep wells in the Caspian Sea is
likely to occur before any from the onshore and offshore
Arctic areas. However, the USSR lacks the equipment and
know-how to conduct a deep drilling program without
Western help. Contracts have been signed and others are
being negotiated with Western firms to provide offshore
drilling capability in the early to mid-1980s.
11-16
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
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 51
percent in 1960 to 44 percent in 1970.
downward probably will likely 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
Further
revisions
Approved For Release 2006/09/21 : CIA-RDP80M00165
?
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.
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 & oil)
needed to maintain oil production.
111-2
DP80M00165A001700120027-5
3Approvedtor ReIle 2006/09/21: CIA-RDP80111106511700120027-5
Soviet reservoir engineers first used this approach
to water flooding 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 water flood 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, by-passing 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
III-3
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved Feelea.006/09/21 : CIA-RDP80M00.A00illi0120027!5
of 50 hectares, 25 hectares, 12 hectares, and 6 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 by-passed 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 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
water-flood 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.
III-4
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
.-Approvecliffir Relee 2006/09/21 : CIA-RDP801065111700120027-5
Ilir
Failure to treat ground water and surface water used
in most water-flood projects also creates 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
cause 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 1971.
III-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved Flpelea.006/09/21 : CIA-RDP80M004A001i012002725
11.IF
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+Ci 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.
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
III-6
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
e'Approved4pr Relee 2006/09/21: CIA-RDP80110654700120027-5
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 eleventh 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 12-14 percent; the water production
was attributed to coning and not to bad cement jobs as
111-7
Approved For Release 2006/09/21 ? CIA-RDP80M00165A001700120027-5
7111
Approved Fillelea1006/09/21 : CIA-RDP80M004,00001200275
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.
USSR: Regional Production of Water
as a Percent of Liquids Recovered
Region
1961
1965
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.
III-8
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
IIP
Approved. Release 2006/09/21 : CIA-RDP80165A001700120027-5
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
111-9
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Relea,006/09/21 : CIA-RDP80M00165A00,0120027-5
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 next 5 years.
Producing anything near 600 million tons (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.
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
?e?
-Approved For Release 2006/09/21 : CIA-RDP80M465A001700120027-5
? ?
USSR: Planned Crude Oil Production
and Estimated Total Fluid Output
Case A: Assumes 50 percent oil and 50 percent water in 1975
and water cut increases 3 percentage points annually.
Oil Water
Total Fluid
Million
Tons
Million
b/d
Million
Tons
Million
bid
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
Case B: Assumes 50 percent oil and 50 percent water in 1975
and water cut increases 6 percentage points annually.
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
363
1979
610
12.2
1,736
34.7
2,346
46.9
1980
640
12.8
2,560
51.2
3,200
64.0
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 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
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Relea.2006/09/21 : CIA-RDP80M00165A001700120027*-5
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.
Approved For Release 2006/09/21 ? CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP804165A001700120027-5
?
IV. 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 of new capacity to offset depletion;
by 1971-75 they required nearly 260 million tons. The
plan for 1976-80 anticipates that as much as 390-400 million
tons 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
IV-1
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Releaso006/09/21 : CIA-RD
decline
? ?
decline in Bashkir output, currently 40 million tons per
year, 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 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, 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, but all of this
the depletion of old capacity.
new capacity went to offset
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 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.
IV-2
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved Fpr Release 2006/09/21 : CIA-RDP80465A001700120027-5
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 of new capacity would be required to
offset depletion during 1971-75. As the plan period progressed,
they were forced to revise this estimate 4 times, and by
the time the plan was completed, 258 million tons of new
capacity had been required to offset depletion. Although
actual new capacity additions far exceeded originally
planned levels (392 million vs 300 million), production
fell 14 million tons short of the goal. The same thing appears
to be happening now. In 1975, the Soviet Oil Minister announced
that 450 million tons of new capacity would be needed
during 1976-80 to produce 620-640 million tons of output.
By mid-1976, this goal was revised upward to 530-540
million tons.
Although the USSR added more than 390 million tons 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
of new capacity. In doing so, however, they pushed the
IV-3
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Relea6006/09/21 : CIA-RDP80M00165A00170012002715
field much harder and faster than originally planned.
As late as 1973, planned peak output at Samotlor had been
only 100 million tons. Now the planned peak is to be reached
in 1977/78 at 130 million tons. In any event, 60 percent of
the increase in total Soviet oil output of 138 million
tons
during 1971-75 came from Samotlor.
During 1976-80 Samotlor will provide a production
increase of only about 43 million tons, if it reaches
output of 130 million tons 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
every new
depletion
rate of
well at
offset.
well depletion. Viewed in this way,
Samotlor after this year will be for
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
IV-4
Approved For Release 2006/09/21 ? CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80465A001700120027-5
? ?
to meet 1978 plan goals by pushing Samotlor's output
higher than the presently planned peak of 130 million
tons, 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
stagnated. Now, not only are development drilling
requirements continuing to rise rapidly, but exploratory
IV--5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Releal2006/09/21 : CIA-RDP80M00165A0017001200275
? ?
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,
drilling productivity of exploratory rigs has fallen by
nearly 20 percent. The productivity of rigs engaged in
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
IV-6
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80Me65A001700120027-5
? 411
Selected Data on Soviet Drilling Activity
1946
1950
1955 1960
Thousand
1965
1970
1975
Meters drilled'
1,003
3,534
4,763 6,740
9,261
10,972
15,116
Exploratory
383
1,449
2,540 3,200
4,752
4,604
5,418
Development
620
2,085
2,223 3,540
4,509
6,368
9,698
Number
Wells completed
950
2,893
3,320 3,892
4,903
5,311
6,0622
Exploratory
342
1,074
1,394 1,660
2,165
1,711
1,9352
Development
(including
water injec-
tion wells)
608
1,819
1,926 2,232
2,738
3,600
4,1272
Meters
Average well
depth
Exploratory
1,120
1,349
1,822 1,928
2,195
2,691
2,8002
Development
1,020
1,146
1,154 1,586
1,647
1,769
2,3502
Rubles per Meter
Average cost
Exploratory
87.6
118.2
124.0 111.9
148.7
238.8
2803
Development
47.7
45.6
48.5 49.4
65.5
84.5
1003
Units
Number of rigs
operating
430
1,119
852 1,130
1,624
1,760
1,8003
Meters per Rig per Month
Commercial drilling
speed
Exploratory
177
209
306 401
377
337
3402
Development
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.
IV-7
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Releas2006/09/21 : CIA-RDP80M00165A001700120027-5
?
? Eli
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.
Drilling Plans
The Soviets plan to increase total drilling
(presumably by the Oil Ministry) to 75 million meters in
Iv-8
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80465A001700120027-5
1976-80.* Dliklill'in West Siberia is to riAlfrom 9
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 totalled 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 1976-1980 call for 30,000 well
completions, compared with 26,000 completions in 1971-75
and about 80,000 total well completions since 1950.
Soviet goals 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 4 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
In 1971-75, drilling of all types totalled 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.
IV-9
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
IP * ?
early 1980s. Meeting 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 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.
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 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. The meterage drilled for development
wells will have to rise by at least 50 percent--to 15
Iv -1 0
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
million meters--to reach this goal by 1980. Average new
development well depths now run 2,000-2,300 meters;
30,000 well completions would require 60-70 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.
Iv-11
raIrrmarl Pnr RaIPAcP 7nnAingo1 CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RD
Approved
?
V. 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)
V-1
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Releao2006/09/21 : CIA-RDP80M00165A001700120027-5
? ?
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 develop-
ment 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
hhave indicated that, without greater domestic capacity
to manufacture petroleum equipment, the 1980 oil production
goal cannot be met.
Exploration Equipment
Frequent complaints appear in the Soviet press about
the shortage of high quality exploration equipment. Most
V-2
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80Ma65A001700120027-5
? W ?
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 downhole turbines used by Soviet turbo-drill
rigs also have a relatively short life, typically only
V-3
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Relea.2006/09/21 : CIA-RDP80M00165A001700120027.-5
1110 ??
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 indicates that a new turbo-drill has been
produced that features a low speed and high torque rating.
V-4
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
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 11,010
such pumps are in operation in addition to those imported
V-5
Approved For Release 2006/09/21: CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
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 wat rflooded
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 large-diameter pipe manufacturing capacity 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 pip
will have to be imported if the planned pipelines are to
be completed.
V-6
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Large-diameter pipe production 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 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
48-inch and 56-inch diameter pipe.
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 3 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
V-7
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Relea.2006/09/21 : CIA-RDP80M00165A001,700120027L5
11110 ? ?
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
Million US $
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
V-8
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
ApprovedRelike 2006/09/21 : CIA-RDP8010654700120027-5
USSR: Orders of Western Oil and Gas Equipment
16.1?
Million US $
236.0
219.9
1972
193.8
117.2
558.4
482.2
'\\:?\\\\\s,
k7,.\\\
500.3
423.9
\\\\\\\
76.4 \
1974 1975
1,617.0
1,3126
1976
1. Excludes imports of large-diameter line pipe, which totaled an additional
$4 billion during 1972-76.
450-081
V-9
FROM THE WEST
2,555.8
FROM THE
UNITED STATES
549.7
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Releagh2006/09/21 : CIA-RDP80M00165A04012002/-5
41111 w ?
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 one 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.
V-10
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
O.
110 410
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.
domestic supply of drill pipe and casing is not
The
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
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
e? ? ?
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 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.
V-12
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
? ?
VI. 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, 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 data on its oil
reserves since 1947, when by law they 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
VI-1
Annmvpd For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
oves or e ease 2006/09/21 : CIA-RDP80M00165A001700120027-5
? ?
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-ye.ar 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.
The Soviets have defined several categories of oil
reserves, A, B, Cl, C2, D1, and D2. Soviet reserves in
A category 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
VI-2
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP804 65A? 700120027-5
three producing wells but not completely enclosed. Category
C1 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 C1 reserves would fall into the US category
of probable. Much of the remainder of the C1 reserves
fall into the US possible category. Moreover, some portion
of Soviet B and C1 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 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 2.6 billion tons of oil in Soviet A and B
reserves on 1 January 1961. A 1974 Soviet publication reported
VI-3
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Releao006/09/21 : CIA-RDP80M00165A00?0120027-A
5
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 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 5.5 billion
tons for A and B reserves as of 1 January 1976. Of this
amount about 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 10.4 billion tons. Subtracting
cumulative production of 5.9 billion tons during 1946-75
leaves 4.5 billion of remaining A reserves at the start of
1976.
The 4.5 billion tons of Soviet A reserves plus a small
portion of the 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 C1
VI-4
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00:165A001700120027-5
Os ?
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.
The
the
US Reserve Analogue
Soviet oil reserves can also
United States as an analogue.
be calculated by
The Urals-Volga
using
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
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 and could total
only about 14 billion barrels. US output of 8.4 million
b/d in 1975 came from a working proved reserve base of only
VI-5
roved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved For Release 2006/09/21 : CIA-RDP80M00165A00170012002-5
e ? IP ?
23 billion barrels.* 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 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.
West Siberian proved reserves probably total some
18-24 billion barrels. Remaining reserves in Samotlor
range from 7.5 to 11 billion barrels, depending on
.
ultimate recovery rates. Initial reserves of about 14-15
billion barrels 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
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 (initial reserve
* Total proved reserves of 35.3 billion barrels in 1975
less 9.6 billion for North Slope reserves and 2.5 billion
in Naval reserves and the Santa Barbara Channel.
VI-6
Approved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5
Approved FeReloe 2006/09/21 : CIA-RDP80M0ii65A001700120027-5
?
of about 11 billion barrels less cumulative production of
3.1 billion barrels).
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 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 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 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
in 1976. The estimate, on a regional basis, is as follows:
Billionbarmls
Total
33.5
Old producing regions
14.0
West Siberia
19.5
Samotlor
7.5
Other producing fields
4.0
Proved nonproducing
8.0
VI-7
Aooroved For Release 2006/09/21 : CIA-RDP80M00165A001700120027-5