TURMOIL IN AZERBAIJAN RIPPLES THROUGH SOVIET INDUSTRY

Feb. 19, 1990
Widespread strikes, civil turmoil, and imposition of martial law in the Soviet republic of Azerbaijan doubtless will damage the U.S.S.R.'s entire petroleum industry throughout 1990. Official figures on Azerbaijan's oil flow have provided hard evidence of production losses in Baku area fields. But the Soviets have yet to evaluate the much larger harm caused by shutdowns or limited operation of Baku's petroleum equipment plants, along with intermittent stoppages of railroad, highway,

Widespread strikes, civil turmoil, and imposition of martial law in the Soviet republic of Azerbaijan doubtless will damage the U.S.S.R.'s entire petroleum industry throughout 1990.

Official figures on Azerbaijan's oil flow have provided hard evidence of production losses in Baku area fields.

But the Soviets have yet to evaluate the much larger harm caused by shutdowns or limited operation of Baku's petroleum equipment plants, along with intermittent stoppages of railroad, highway, and even Caspian Sea transportation to and from Azerbaijan's capital city.

AZERBAIJAN'S ROLE

Azerbaijan, the U.S.S.R.'s largest oil producer in 1940 at 445,000 b/d, now accounts for only about 2% of total Soviet crude and condensate production and a little more than 1 % of natural gas flow.

By contrast, the Baku area still manufactures as much as 60% of the nation's oil and gas field equipment. All major Soviet petroleum producing areas depend heavily on Azerbaijan's industry.

Even before Azerbaijan's unrest began, oil and gas field personnel in other areas complained bitterly and often about equipment shortages and irregularity of delivery. Many items used in newer Soviet producing regions can be obtained only from a single supplier, often located in Azerbaijan.

Last year, partly because of manufacturing problems in Azerbaijan, the U.S.S.R.'s production of petroleum equipment fell 15% and met only 86% of the government's plan. By contrast, the Soviet Union's machine building industry as a whole increased production 3.2%.

A Jan. 25 survey of Baku's factories showed only 22 plants operating at or near capacity, 17 in partial production, and 325 shut down. On Jan. 27 the Rabochaya Tribuna newspaper published a dispatch from Baku that said the city's surface transportation was practically paralyzed.

"Buses and trolleys are not running," the dispatch said. "Trains are not moving. The airport has been kept open despite serious difficulties.

"A flood of rumors and cock-and-bull stories sweeps Baku. Extremist elements try to maintain tensions."

Soviet television said in late January it probably will take about 1 year to put Azerbaijan's oil industry back in working order. The official Soviet news agency Tass reported that 650 oil wells in one field were not producing.

"These wells-one third of the field's total-need repairs and equipment replacements," Tass said. "At least 3 months of intensive work are needed to put them back in service, according to the oil field's administrator. "

The news agency said leaflets circulated in the Baku area called for continuation of strikes. It added that 188 freight trains were at a standstill on Azerbaijan's railroads.

PRODUCTION PERFORMANCE

An article in the Baku newspaper Vyshka declared that during 1989 Azerbaijan produced 93.8% of its government decreed oil quota. But flow slackened greatly as disorders grew toward the end of the year.

Last December only 52.7% of the planned oil flow was achieved in Azerbaijan's old onshore fields and 95.5% in Caspian Sea fields. Onshore oil field officials last year pleaded with Moscow to reduce the "unrealistic" production targets that had been set.

Vyshka said Moscow planners promised to cut production quotas for onshore fields "but their assurances were left dangling in the wind." There was a general breakdown in worker discipline, a drop in responsibility, and a lack of desire to strive for the best results, the newspaper declared.

"Oil field workers went on strike in September and December. This caused destabilization of operations at Baku's refineries."

Vyshka said because of worker unrest, the 1990 production quota for onshore Azerbaijani oil fields was cut to 58,000 b/d, a figure that was, however, higher than onshore flow during fourth quarter 1989.

As recently as 1985, Azerbaijan had more than 10,000 onshore wells. Their average yield was only about 7.5 b/d.

By last December, onshore Azerbaijan production had fallen to less than 50,000 b/d.

In Caspian fields, where nearly 80% of Azerbaijan's oil is produced, the 1990 production quota was reduced to 200,000 b/d from 210,000.

Peak Caspian Sea crude and condensate flow was 258,000 b/d in 1970.

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