The Russian Oil Economy

375 Pages·2002·94.83 MB·English

by  Jennifer I. Considine

This book is dedicated to
Melvin A. Conant
Alexander Kemp
James D. Gaisford
and Richard P. Kendon
The Russian Oil
Economy
Jennifer I. Considine
Associate Editor, Geopolitics of Energy
William A. Kerr
Van Vliet Professor, University of Saskatchewan, Canada
Edward EIgar
Cheltenham, UK Northampton, MA, USA
0 Jennifer I. Considine and William A. Ken- 2002
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means, electronic,
mechanical or photocopying, recording, or otherwise without the prior
permission of the publisher.
Published by
Edward Elgar Publishing Limited
Glensanda House
Montpellier Parade
Cheltenham
Glos GL50 1UA
UK
Edward Elgar Publishing, Inc.
136 West Street
Suite 202
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library of Congress Cataloguing in Publication Data
Considine, Jennifer I., 1962-
The Russian oil economy / Jennifer I. Considine, William A. Kerr.
p. cm.
Includes bibliographical references and index.
1. Petroleum industry and trade-Russia (Federation) I. Kerr, Williarn A., 1947-
11. Title.
HD9575.R82 C57 2002
338.2’ 728’0947-2 1 2002019529
ISBN 1 84064 758 2
Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
Contents
List of Tables vii
Preface xi
1 Introduction 1
2 Risky Business - Oil in the Russian Empire 15
3 The Command Oil Economy 23
4 An Industry Fit for a Superpower 57
5 Malaise at the End of the Command Era 87
6 Desperate Measures 145
7 The New Wild West 235
8 Russian Oil in the 21'' Century 297
Appendix A: The Early Regional Development of the
Russian Oil Industry, 1860-1 975 309
Appendix B: Reserve Classifications of the Soviet Union 317
Appendix C: Long-Distance Oil Pipelines in Russia, 1908-88 321
Appendix D: Internal Oil Pricing Policies of the Soviet Union 329
References 351
Index 357
V
This Page Intentionally Left Blank
Tables
3.1 Industrial production in Russia, 1913 -26 24
3.2 Soviet oil exports 28
3.3 Soviet crude oil production: scheduled and actual 32
3.4 The regional concentration of the Soviet oil industry 40
3.5 Soviet crude oil production and imports from the
United States 43
3.6 The fourth five-year plan 47
3.7 Soviet crude oil production and international trade
statistics, 1946-55 52
4.1 The fifth and sixth five-year plans 59
4.2 USSR crude oil production, 1950-65 61
4.3 Production, productivity and idle wells, 1946-60 62
4.4 Soviet oil trade with non-communist countries
1950-54 64
4.5 The seventh seven-year plan 74
4.6 Capital investment in the Soviet energy economy,
1946-65 77
4.7 The production of primary energy sources in the
USSR, 1955, 1958 and 1965 78
4.8 Soviet crude oil production and international trade
statistics, 1955-68 80
4.9 Average prices paid for Soviet crude oil, 1955-67 82
5.1 The eighth, ninth and tenth five-year plans, 1965-80 91
5.2 Capital investment in the Soviet energy economy,
1965-80 93
5.3 Capital investment in the oil industry by region,
1965-85 96
5.4 USSR crude oil production, 1965-80 97
5.5 The distribution of test drilling in the USSR,
1920-70 98
vii
viii The Russian Oil Economy
5.6 West Siberian crude oil production, 1964-70 99
5.7 Hard currency earnings from Soviet oil exports to
non-communist nations, 1955-67 101
5.8 Annual prices for Soviet crude oil in East and
West Germany, 1959-67 104
5.9 The transportation of crude oil and petroleum
products in the USSR, 1940-71 107
5.10 Capital investment in Soviet energy economy,
1966-80 115
5.1 1 Capital investment in the Soviet oil industry, 1966-80 116
5.12 Five-year planning targets for Tyumen, West Siberia 118
5.13 Exploration and development drilling for oil and gas
in the USSR 120
5.14 Drilling and production costs in the USSR, 1960-85 126
5.15 Exploration and discovery in the USSR, 196 1-75 127
5.16 Production, productivity and idle wells, 1960-76 128
5.17 Soviet crude oil production and international trade
statistics, 197 1-82 137
5.18 Hard currency earnings fiom Soviet oil exports,
1971-85 138
5.19 Average prices paid for Soviet oil exports 139
6.1 Capital investment in the Soviet oil industry,
1976-85 149
6.2 Energy investment in the ninth, tenth, and eleventh
five-year plans, 197 1-85 151
6.3 Capital investment in the Soviet energy economy,
1976-90 151
6.4 The eleventh and twelfth five-year plans, 1985-90 153
6.5 Production, productivity and idle wells, 1975-85 154
6.6 Average well depth, drilling productivity, and
production costs in the USSR, 1960-85 157
6.7 New oil well completions and productivity in the
USSR, 1980-90 159
6.8 Exploration and development drilling in the USSR
for oil and gas 160
6.9 The USSR’s perception of ultimate oil recovery
around the world 166
6.10 Water flooding in the USSR, 1950-87 167
6.1 1 Water flooding in West Siberia, 1965-87 168
Tables
IX
6.12 Incremental oil produced by EOR methods in the
USSR, 1975-90 171
6.13 Energy targets for the twelfth five-year plan, 1985-90 186
6.14 Energy conservation in the Soviet Union 188
6.15 Exploration and development drilling in the USSR 193
6.16 Exploration and development drilling activity for oil
and gas by the oil production associations for select
regions in the Russian Federation 196
6.17 Crude oil and condensates production in the USSR 197
6.18 Growth of gross fixed investment by sector, 1976-90 20 1
6.19 Soviet crude oil and condensates production and
international trade statistics 202
6.20 Soviet oil exports to the industrialized West and
East Europe 204
6.2 1 Hard currency earnings from exports in the Soviet
Union 207
6.22 Hard currency balance of payments and debt in the
Soviet Union 208
6.23 State budget expenditures in the USSR 21 1
7.1 Average producer prices for crude oil in the
Russian Federation, 1990-94 23 9
7.2 Taxes and costs of crude oil in the Russian Federation
- crude oil produced by Russian enterprises for
domestic use, 199 1-97 242
7.3 Taxes and costs of crude oil in the Russian Federation
- crude oil produced by Russian enterprises for
export to destinations outside the CIS, 1991-97 244
7.4 Taxes and costs of crude oil in the Russian Federation
-joint venture exports, 199 1-97 246
7.5 The evolution of the petroleum fiscal regime in the
Russian Federation, 1991 -97 252
7.6 Russian Federation crude oil prices vs. the world oil
price, 1990-97 267
7.7 The implied opportunity cost of Russian Federation
pricing policies to the domestic oil industry, 1990-94 268
7.8 Russian Federation gasoline prices vs. international
gasoline prices, 1990-97 27 1
7.9 Russian Federation heavy fuel oil prices vs.
international heavy fuel oil prices, 1990-97 272