SOVIET GAS FLOW RISES WHILE OIL SLIDE SLOWS

Soviet economists believe they can see a faint light at the bottom of the deep hole the U.S.S.R.'s energy industry has fallen into this year. Moscow admits the dimly perceived glow may flicker out if the Soviet Union's political and economic problems aren't soon solved.

Sept. 23, 1991

3 min read

Soviet economists believe they can see a faint light at the bottom of the deep hole the U.S.S.R.'s energy industry has fallen into this year.

Moscow admits the dimly perceived glow may flicker out if the Soviet Union's political and economic problems aren't soon solved.

But the official newspaper Izvestia reported shortly after the failed August coup by Communist hardliners that natural gas flow was beginning to make gains over the same 1990 period, while the pace of decline in crude and condensate production slowed significantly from the sharp plunges recorded during the first 5 months of the year.

Although some coal mine walkouts occurred during the coup attempt, widely feared work disruptions did not spread to oil and gas production.

GAS PRODUCTION

Izvestia said Soviet gas flow began to increase again in the summer after showing almost no gain during first half 1991. Crude and condensate production in June and July fell at less than half the rate recorded during the first months of the year.

Despite the recent upturn, Soviet gas flow is still expected to slip below Moscow's 1991 target of 826.2 billion cu m (28.76 tcf).

Izvestia emphasized that the U.S.S.R.'s fuel situation is still alarming in view of approaching cold weather. It said the nation's richest gas fields are being poorly exploited, with production considerably below potential.

The newspaper warned that disputes between Soviet republics must not be permitted to hamper operation of the nation's integrated gas transmission system. It noted that because of disruptions in previous economic relations gas producers are not getting the materials required to develop new fields, construct underground gas storage reservoirs, or build more processing capacity for gas and condensate.

In particular, there is a critical shortage of pipe, cable, and equipment formerly purchased from foreign suppliers.

CRUDE, CONDENSATE

Izvestia said despite recent encouraging signs that the U.S.S.R.'s 3 year long oil production decline is slowing, it is urgent that production be stabilized quickly.

In late August, crude and condensate flow exceeded the planned level by more than over 58,000 b/d.

"But this can't be considered success," Izvestia said.

Production is still falling even though the monthly rate of decline was reduced from nearly 55,000 b/d during early 1991 to 18,000-22,000 b/d in June and July. Oil production for the first 7 months of the year averaged more than 203,000 b/d below plan and showed a drop of nearly 387,000 b/d for the period.

At present, 12% of the nation's oil wells are idle vs. a normal 8%.

That means 7,500 more wells are not operating than should be, resulting in a production loss of 365,000438,000 b/d.