The slide in Soviet oil flow won't likely be reversed soon.
Production could drop another 4%-maybe more-this year following a decline in 1989 of about 2.5% from the previous year.
For the near term, natural gas offers the best hope for growth in energy production.
That's according to Robert Ebel, Enserch Corp. vice president, international affairs, Washington, D.C.
Ebel expects 1990 Soviet oil production to average about 11.6-11.7 million b/d, compared with 1989 output of 12.14 million b/d. The total includes about 700,000 b/d of natural gas liquids.
Oil production dropped 4% in the first quarter of this year, according to Ebel. And for the first 5 months of this year, the Soviets recently reported a 5% drop.
Fields in Western Siberia account for two thirds of Soviet production. Many of those fields are now in decline, and new fields are not taking up the slack. New discoveries tend to be smaller, deeper, and involve more complex geology.
The U.S.S.R. had a production slump in 1985-1986, too. The decline was reversed then, but it likely will take longer and be more difficult this time, Ebel predicts. The oil recovery coefficient has been slipping in recent years, contributing to the production decline.
Ebel estimates Soviet oil reserves at 83 billion bbl, about a 20 year reserves: production ratio at current flow.
Slipping oil production has been particularly troublesome in the case of power generation.
Coal production declined in 1989 and was off 6% in first quarter 1990. Coupled with the shutdown of nuclear power plants due to safety concerns, declining oil and coal production have triggered a shortage of electrical power.
As many as 10 nuclear power plants have been shut down, leaving 15 operating.
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