MIXED RESULTS FOR SOVCIET OIL AND GAS IN 1965

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A002500070002-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: January 30, 2002
• Sequence Number: 2
• Publication Date: February 9, 1966
• Content Type: PAPER

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ect 25.5305
sect Results for Soviet Oil and Gas in 1965
tan 61161
9 'ebruery 1966
CONFIDENTIAL
GROUP 1
Excluded from aufomaile
dow.9grad+ng and
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Results for Soviet Oil and Gas in 1965
Although production of both crude oil and natural gas in the USSR in 1965
was in excess of plan, results for the industry as a whole for the year were
fixed. Production of crude oil in 1965 exceeded the original Seven Year. Plan
(1959-65) goal for that year by about 3 percent, but n
of its original goal by l4+ percent, largely because of inadequate transmission
capacity and e lack of consumers. The production successes in 1965 were
by failures in the pipeline and refinery construction programs. F. :por?ts
of oil continued to increase, reaching about 25 percent of supply, but the
oil export drive was overshadowed somewhat by activities in natural gas
trade, implying perhaps a major role for the latter commodity
The production of crude oil reached 243 million metric tons
an increase -f about 8.7 percent compared with 1964, a -ad in excess of the
ginal Seven Year Plan goal of 230 to 2Z0 million mt. 1/ The extraction of
natural gas increased by.17 percent, to an estimated 12'U.4 billion cubic
meters (bcs),. but output.fell short of the Seven Year Plan goal by 1 percent,
reflecting inadequate transmission capacity and a failure to ready consumers.
crude oil was begun at the major new oil producing
regions of the USSR --- Western Siberia and the
shim Peninsula of
Kazakhstan - but their contribution to national supply was insignificant.
The Urals-Volga oil fields continued to provide the bulk of the crude o
output as production accounted for a. reported 72 percent of the USSR total
in 1965. /
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pressing need to move increasingly larger quantities of fuel
into the energy-deficient European USSR forced Soviet officials to make two
important decisions in 1965 in on effort to meet this need. Construction
was begun on a 3,375 kilometer (km) dual 40-inch gas pipeline designed to
move gas from Central Asia to the Moscow industrial region. This was
followed by formulation of ,plans to develop the newly found
Novyy Port, located in Tyumen Oblast about 120 km north of the Arctic Circl?e.
1ovyy Port gas will be supplied to Leningrad and to Minsk in Belorussia iris
a 3,000 1t pipeline, construction of which is to begin in the near future.
Oil and gas pipeline construction during 1965 was not marked by any
outstanding achievement. Construction emphasized the building of natural
gas systems, as has been the pattern in recent years. Work continued on the
building of a second. gas pipeline between the Gazli fields
fall are not clear but it may be that a portion of the steel pipe allocate
the Urals. This 2,000 140-inch pipeline was to have been completed in 1965
but actual construction has fallen short of plan. eesons for this short-
ion of this pipeline has been diverted to initial construction
on a third pipeline between Gazli and the Urals.* Construction also continued
ublic gas pipeline system in Central Asia.
i of a third gas pipeline between Gazli and the Urals was no
included in the original Seven Year Plan. However, experience gained, in
)peration of the Gazii-Ural gas pipeline no. ls which was completed In
1963, has found that the pipeline, for technical reasons, could not move gas
in the scheduled amounts. To carry that amount of gas originally scheduled
for Gazli-Ural no. 1 and no. 2 - 21 been annually would now require the
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(Note: This map will be updated to 1 February 1966 and will show the following
changes.,' The Berezovo-Serov portion of the gas pipeline under construction be-
t Teen l rezovo end Chelyabinsk has been completed; the Sbaim-Tyumen oil pipe-
line is completed; the oil pipeline from the West Siberian oil fields to Orisk
is now under construction; an oil pipeline is planned from Me ion to An,cero-
dzhens , (Megion Is the oil field to the east of ur ut); a third ga:3 line
is user construction between Wtkh ra and the Urela; and the map will show the
,recently completed Kiriehi oil re ftnery,
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uff
Only one major oil pipeline
to have been completed in
1965 - the 430 im, 20-inch crude oil pipeline from the Shaim oil fields
West Siberia to Tyumen. 5
Construction continued on parallel oil pipelines
between Baku and Batumi and between Sakhalin Island and Komsomolsk on the
mainland. Extension of a crude oil pipeline beyond Yaroslavl in the direction
of Leningrad continued and the first few km were installed on the 1,000 Ism
40-inch pipeline between the Ust-Balyk oil fields. in West Siberia and the Omsk
oil refinery. Finally, the Polotsk-Ventspils oil pipeline, of major concerti
to the Soviet desire to export larger quantities of oil from the Baltic area,
.was not finished in 1965, as had been planned, and construction will be
carried over into 1966. 9
3. Refini ,
only one oil refinery --- Kirishi,. located ab out 100 km southeast of
Leningrad -- came on etreem in 1965. J Because the first crude oil was
delivered to Kiriahi in only late December, these new facilities-were of no
practical use to the refining industry during the year. Nevertheless, total
capacity to refine crude oil in the USSR is estimated to have increased by
13 million at, or by 6 percent. This growth in capacity was obtained through
a combination of expansion of existing refineries and a more intensive use of
available capacity. Except for continuing spot shortages of diesel fuel,.,
petroleum products generally were available in quantity end quality adequate
for domestic needs.
CUNHHHTIAL
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Preliminary estimates for 1965 indicate that the USSR probably
. Tr
exported on the order of 61 to 62 million mt of crude oil and petroleum
products, equal to about 25 percent of supply, and approximately 8.7 percent
more than in the previous year. Thus the relative growth in exports of oil
matched the growth in crude oil production. No breakdown in deliveries
between other Communist and non-Communist countries is feasible yet. The
export of oil from the 'USSR in 1965 probably represented maximum capability
but there is no evidence of domestic supply having been curtailed in order
to expand exports. In general, oil continued to be marketed in areas an
under conditions which would bring about the greatest return.
Also during 1965 the USSR demonstrated an increasing interest
trade in natural gas. The USSR is to import considerable quantities of gas,,
ultimately reaching about 13 bcx. per year, as part of expanded trade
relationships with Iran and Afghanistan. A 1,000 km pipeline is to be built
from the Gach Saran-Agha Jeri fields in the south of Iran to Asters on the
Iran-Soviet border, 8 The pipeline, to be completed in 1970, is to supply`
Azerbaydzhan with about 10 billion cubic meters of gas annually by 1975.
ngs from the sales of gas by Iran to the USSR will be used to repay the
290 million credit granted Iran by the USSR for the construction o:
machine tool plant, and the gas pipeline.
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The Shibarghan gas fields in northern Afghanistan will be tapped for
the ultimate export of about 3 bcm of gas annually to the USSR. A pipeline
reportedly is to link these fields with Dushanbe, the capital city of
Tadzhik SSR. Proceeds from the sale of gas to the USSR will be used to
reduce the currently unfavorable trade balance between Afghanistan end the
USSR.
These
rte of gas by the USSR may be balanced off by exports to
Poland, Czechoslovakia, Japan and by rumored sales to Italy. Negotietto:
with Japan reportedly involve the construction of natural gas liquefaction
Lilties on
uis
the delivery of the liquefied gas to Japan. Lot Japan presumably would
supply the liquefaction equipment, steel pipes, and the tankers, valued
on the order of S 200 million. Rumored sales of gas to Italy involve the.,
construction of a pipeline frzm7, the USSR through Hungary end Yugoslavia to
northern Italy, with exports on the order of 7 bcm annually.
Natural gas quite likely will play an important role in Soviet
foreign trade in future years. This commodity, which the USM possesses in
abundance, is finding increasing international use as an industrial and
household fuel and as a petrochemical raw material, and sales abroad could
provide at least a partial answer to growing foreign exchange. requirements.
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