Russia's plunging oil production is placing a severe strain on the economic and political viability of the new Commonwealth of Independent States (C.I.S.) and dealing a jolt to the former U.S.S.R.'s role in the world petroleum market.
New official data show that Soviet 1991 oil exports fell for the third straight year. Energy sales to other former Communist nations were especially hard hit.
Crude and refined products exports slumped. Natural gas exports, which had risen strongly since the early 1970s, also declined in 1991 along with production.
OIL AND GAS PRODUCTION
Moscow reports C.I.S. oil production dropped to less than 10.3 million b/d last year from more than 11.4 million b/d in 1990. The former U.S.S.R.'s crude and condensate production peaked at about 12.48 million b/d in 1988 and 1989, then fell to 12.14 million b/d in 1990.
Last year's oil flow tumble was by far the largest in Soviet history. C.I.S. liquid hydrocarbon production apparently will show another sharp slide during first quarter 1992.
An analysis published by the Moscow business weekly Economika i Zhizn (Economics and Life) predicts this year's oil production in the Russian republic will be only 8-8.2 million b/d (OGJ, Jan. 27, p. 36).
Because Russia produced nearly 90% of C.I.S. crude and condensate during 1991, total 1992 oil flow for the commonwealth could go as low as 8.9-9.1 million b/d if the Ekonimika i Zhizn forecast proves correct.
The Russian republic produced 9.22 million b/d in 1991. That is down about 11% from 10.36 million b/d in 1990.
Only three of the 12 C.I.S. members showed oil production gains last year. Kazakhstan flow rose to 532,000 b/d from 516,500 b/d, Uzbekistan to 56,000 b/d from 55,500 b/d, and Belarus to 42,000 b/d from 41,900.
Besides Russia, the biggest proportional decline in 1991 C.I.S. oil production was in Tadzhikistan, where it was down 25% to about 2,000 b/d. Ukraine's crude and condensate flow fell 6% to 98,000 b/d and Azerbaijan's down 6% to 234,000 bid.
C.I.S. natural gas flow declined 0.5% to 28.59 tcf in 1991 from 28.77 tcf in 1990. Russia's gas production gained 0.4% to 22.7 tcf from 22.61 tcf and Kazakhstan's 11% to 279 bcf from 251 bcf.
But flow in Turkmenistan, the commonwealth's second biggest producer, slid 4% to 2.98 tcf last year from 3.1 tcf in 1990. Ukraine's gas flow dived 13% to 861 bcf from 990 bcf and Azerbaijan's 13% to 304 bcf from 349 bcf.
The C.I.S. State Statistical Committee said production of oil and gas was reined by failure to place new capacity on stream as scheduled in practically all areas of the nation. That was because of a big cut in capital spending and failure to deliver planned volumes of materials and equipment.
EXPORTS DECLINE
Declining oil and gas production has forced the C.I.S. to reduce its exports of both fuels.
C.I.S. crude exports plummeted 52% to 1.032 million b/d in 1991 from 2.172 million b/d in 1990. The U.S. S. R. sold 2.546 million b/d of crude in 1989 and a record 2.885 million b/d in 1988.
Exports of refined products fell 18% to 820,000 b/d in 1991 from 1 million b/d in 1990. The U.S.S.R.'s foreign sales of products peaked at 1.22 million b/d in 1988 and totaled nearly 1. 15 million b/d in 1989.
Natural gas exports dropped to less than 3.69 tcf last year from almost 3.85 tcf in 1990. The 4% decline in C.I.S. foreign gas sales stemmed in part from increased domestic demand caused by a 10% drop in coal production. That required greater use of gas in power plants.
As recently as 1990, fuel and electricity accounted for more than 40% of the U.S.S.R.'s total exports. With foreign sales of all forms of energy-oil, gas, coal, and electricity-plummeting in 1991, total value of the nation's gross 1991 exports fell 33%.
The sharp decrease in exports, led by energy, forced the former Soviet Union to slash imports even more drastically-by 4.4%.
Total international trade by the now dissolved U.S.S.R. dropped to the lowest level since 1980. The nation was unable to pay interest on its foreign debt, let alone reduce the principal.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
