GORBACHEV SEEKS TO HALT OIL DECLINE

The severe hemorrhage in the Soviet Union's oil industry has at last attracted the attention of top Moscow leaders. Tass news agency early last week reported that President Mikhail Gorbachev had ordered the U.S.S.R. Cabinet of Ministers to prepare within 1 week recommendations on how to improve financing and supply of material and technical resources to the industry. Tass said Gorbachev termed that an urgent task. Part of the task will involve the supply of better food and consumer goods

Feb. 4, 1991

2 min read

The severe hemorrhage in the Soviet Union's oil industry has at last attracted the attention of top Moscow leaders.

Tass news agency early last week reported that President Mikhail Gorbachev had ordered the U.S.S.R. Cabinet of Ministers to prepare within 1 week recommendations on how to improve financing and supply of material and technical resources to the industry.

Tass said Gorbachev termed that an urgent task. Part of the task will involve the supply of better food and consumer goods to oil and gas producing regions.

Longer term, Gorbachev ordered first half 1991 preparation of "a package of decisions to create real conditions for reliable operation of market mechanisms to ensure a steady functioning of oil and gas facilities."

The orders came at the end of a cabinet meeting in which speakers cited the need to step up oil production, provide "more comprehensive" oil processing, and draw up an oil and gas conservation program.

OIL PRODUCTION SLIDE

Official government statistics reported by Moscow's Pravda newspaper show that Soviet oil production last year averaged 11.39 million b/d, down from 12.04 million b/d in 1989.

The production slide in 1991 could amount to 800,000 b/d to 1 million b/d. And overall, the U.S.S.R.'s steadily shrinking production could put an end to exports by 1993, Pravda warned.

A report from representatives of Salomon Bros., New York, underscored problems in western Siberia's big Tyumen Province producing region. After a visit there last December, the representatives reported about one third of the region's wells were not pumping and there were no oil country goods inventories visible anywhere in Siberia.