Soviet primary fuel production, including oil, gas, and coal, fell in 1989 for the first year since the end of World War 11.
Oil and coal production declined, more than offsetting a smaller than expected increase in gas flow.
Outlook for a substantial rebound in oil production during 1990 is not good. Moscow officials say they will be satisfied if crude and condensate flow stabilizes at last year's level.
Soviet gas production most likely will rise through the 1990's. But yearly gains are likely to be less than the huge jumps of 1-2 tcf that marked 1980-88.
The government's long term program to reduce fuel consumption per unit of gross national product made only slight progress in 1989. Soviet industry lags far behind comparable sectors of developed capitalist nations in this measure of fuel efficiency.
Domestic gas consumption had to be increased more than planned last year because coal production fell 32 million metric tons below the 1988 level. Strikes in the U.S.S.R.'s main coal regions were responsible for the loss of 7 million tons of coal production.
STILL NO. 1
Despite its growing energy problems, the U.S.S.R. still has no serious challenger as the world's largest oil and gas producer.
Soviet 1989 crude and condensate flow dropped to an average 12.14 million b/d from 12.452 million b/d in 1988 and a record 12.484 million b/d in 1987 (OGJ, Feb. 5, Newsletter). Last year's oil production was the smallest since 1985. It was the fourth year that average daily flow fell in the 1980's.
Soviet oil production climbed strongly and steadily throughout the 1970's.
The U.S.S.R. had hoped to produce more than 12.6 million b/d last year. However, production fell from 12.329 million b/d during the first quarter to about 12 million b/d in the final 3 months.
Original Soviet target for 1990 crude/condensate production under the current 5 year economic plan was 12.5-12.8 million b/d. It now appears that even 12.5 million b/d is unattainable in 1990 and production could slip below the 1989 level.
TROUBLE IN WESTERN SIBERIA
Western Siberia, which produces about two thirds of the U.S.S.R.'s oil, registered the biggest decline last year.
Discontent among workers and management personnel in western Siberia's prolific oil and gas districts forced the retirement last month of G.P. Bogomyakov, the hard driving, often ruthless first secretary of the Communist Party Central Committee in Tyumen Province.
Bogomyakov, whose nomination as minister of the U.S.S.R.'s newly combined oil and gas industries was rejected last year, was instrumental in directing Tyumen Province's much criticized policy of increasing hydrocarbon production "at any price" and neglecting worker welfare during the province's spectacular boom period of the 1970's and 1980's.
Last spring, Bogomyakov admitted that Tyumen oil flow likely would fall during the early 1990's. But he insisted that Tyumen's resources are big enough to provide 9-10 million b/d of crude and condensate during the next 20-, 30 years and the U.S.S.R. as a whole can average 12.5-14 million b/d during that period.
Oil flow also was down in most other Soviet producing regions during 1989. Production again declined in the Volga-Ural area, the country's second largest crude producer.
Soviet geologists claim that annual discoveries of crude and condensate reserves, largely in western Siberia, are still higher than production. But they concede that these new reserves are being found most frequently in small, remote fields from which oil recovery will be difficult and costly.
Eastern Siberia, along with the pre-Caspian depression, are regarded as promising for giant oil strikes. However, the long predicted start of commercial crude/condensate production in eastern Siberia has not occurred.
Moscow admits that oil produced with the help of enhanced recovery methods is still "insignificant" nationwide.
GAS PRODUCTION
Soviet gas production last year was about 28.1 tcf vs. 27.18 tcf in 1988. Target for 1989 was 28.95 tcf.
The U.S.S.R.'s 1989 gas flow increase of less than 1 tcf compared with a hike of more than 1.5 tcf in 1988 over 1987.
Original Soviet 1990 gas production target was 29.4830.01 tcf, and as recently as 1988 that range seemed achievable. But with last year's gain so much smaller than expected, even the lower limit of the 1990 plan may not be attained.
Long range projections made in the mid-1980's saw U.S.S.R. annual gas production exceeding 1 trillion cu m (35.3 tcf) by the mid-1990's. That goal is increasingly regarded as too optimistic.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
