PRODUCTION OF NATURAL GAS AND NATURAL GAS LIQUIDS IN THE USSR

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CIA-RDP79S01046A000100090001-1
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May 28, 1954
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Approved For Release 1999/09/08, CIA-RDP79S01046A0.00100090Q0'~-1 Approved- For Release 1999/09/08.' :CIA-RD WARNING This :material contains information: affecting the ~ National Defense- :of -the United States within the .meaning of tYie espionage laws, Title 18, USC, -Secs. 793 and 784, the -trans- mission or. revelation of which 3n any:::manner Ito an unauthorized persozi is prohibited by-law;. Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 US OFFIC IALS ONLY RESEARCH AID PRODUCTION OF NATURAL GAS AND NATURAL-GAS LIQUIDS IN THE USSR ORR Project 25.192 CENTRAL INTELLIGENCE AGENCY Office of Research and Reports Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E-C -R -E -T FOREWORD This research aid represents the first effort to estimate the po~t- war production in the USSR of the three components comprising total petz?ol~.um production: crude oil, natural-gas liquids,-and natural gas. Official`~~A~iet published prewar data, as shown in this research aid, clearly, discr~.minate between these three components of petroleum pro- duction. Conversely, the fragmentary data on quantitative postwar petroleum production claimed by the USSR cannot be concisely related to either total petroleum production or any combination of petroleum production components.. In the USSR the term neft? (translated as either petroleum or oil) is used indiscriminately to .designate crude oil only, crude oil plus natural-gas liquids, or crude oil plus unrevealed quantities of natural gas. This use contrasts with US practice of designating crude oil, natural-gas liquids, and natural gas as separate components of petroleum. To illustrate the relative size of petroleum production in the USSR and the US, the claimed production of? neft? in the USSR is usually compared with the production of crude oil in the US. For example, 1953 US production of crude oil of 316 million metric tons is compared with the Soviet-claimed production of 52 million metz~ic tons, indicating US production to be about 6 times that of the USSR. In recent years the Soviet-claimed production of neft? actually has included increasing quantities of natural-gas liquids, thus invalidating the comparison. Amore accurate estimate of the rela- tive petroleum production in the two countries is given by a compari- son of the total output of petroleum --. crude oil plus natural-gas liquids plus natural gas. On this basis, the 1953 US production of 5~+5 million metric tons compared with the estimated Soviet production of 57.2 million metric tons indicates that US production was 9.5 times that of the USSR, more than 50 percent greater than the-ratio derived by the commonly used method of comparison. S -E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001=1 S -E -C -R -E -T CONTENTS Page Summary . 1 I. Production 2 II. Terminology and Technology . 2 III. US Practice and Data 5 IV. Soviet Practice and Data 6 V'. Production of Natural-Gas Liquids in the USSR 8 VI. Production of Natural Gas in the USSR . g Appendixes Appendix A. Methodology 11 Appendix B. Gaps in Intelligence 39 Appendix C . Sources . . . 41 Tables 1. Estimated Production of Crude Oil., Natural-Gas Liquids, and Natural Gas in the USSR, 1927-28 - 1940 and 1945-55 . . 3 2. Production of Crude Oil, Natural-Gas Liquids, and Natural Gas in the US, 1946 and 1953 5 - Production of Crude Oil, Natural-Gas Liquids, and Natural Gas in the USSR, 1945 and 1953 . 7 4. Significant Data on Natural-Gas Trunk Lines in the USSR . g S-E-C-R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T Page 5. Selected Physical Properties of Normal Hydrocarbons Occurring in Natural-Gas Liquids and Natural Gas 15 6. Distribution of Proved Reserves of Petrolei~n Components in the US in Terms of Percent by Weight of Crude Oil, 1946 and 1952 . 18 7. Production Compared_ with Gross Withdrawals from Oilfields of Crude Oil, Natural-Gas Liquids, Natural. Gas, and Total Petroleum in the USSR and the US, Selected Years 1930 - 52 . . . 20 8. Estimated Prewar Production and Withdrawals of Crude Oil, Natural-Gas Liquids, and Natural Gas in th.e USSR, 1927-28 - 1940 9. Estimated Postwar Production and Withdrawals of Crude Oil, Natural-Gas Liquids, and Natural Gas in the USSR, 194.5-55 30 10. Estimated Gross Annual Increases Required in Crude Oil Production in the USSR, 1945-55 32 11. Data on Natural-Gas Trunk Lines Serving Gasfields and Estimated Recovery of Natural-Gas Liquids :from Such Fields in -the USSR, 1950 . . 34 12. Estimated Maximum Range of Possible Values of Postwar Production of Petroleum Components in the USSR, 1945-55 . 37 S-E-C -.R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 C IA~RR RA (ORR Project 25.182) S-E-C -R-E-T PRODUCTION OF NATURAL GAS AND NA.TURA.L-CrAS LIQUIDS IN THE USSR* Summary It is estimated that natural-gas liquids produced in the USSR in 1953 were equal to about 6 percent of the weight of crude oil, as contrasted with a 10-percent ratio in the US. It appears that in Soviet oilfields additional natural-gas liquids can be recovered from wet natural gas now being wasted, probably with less effort than would be required for an equivalent increase in crude oil. The utilization of natural gas in the USSR is in its early stages. Existing pipelines are mostly low-capacity short lines designed tc~ serve local needs in or near the oil and gas fields. Since World War II, a few large-capacity natural-gas trunk lines, designed to trans- port natural gas from the fields to large centers such as Moscow and Kiev, have been completed. The capacity of these lines is probably being increased by looping (paralleling) and by other measures. The Fifth Five Year Plan (1951-55) calls for an 80-percent increase in gas production. Current production estimates for-1953 are 48.6 million metric tons~-~ of crude oil, 3.1 million tons of natural-gas liquids, and 4.5 million tons of natural gas. The sum of these 3 components in- dicates a total 1953 petroleum production in the USSR of 57.2 million tons. The current Soviet claims for the production of neft' (trans- lated as either petroleum or oil) in the USSR in 1953 are from 52 to 53 million tons. ~ The estimates and conclusions contained in this research aid rep- resent the best judgment of the responsible analyst as of 15 Feb 1954. -~ Tonnages throughout this research aid are given in metric tons. S -E -C -R-E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T I. Production.- . Estimates and forecasts of the production of natural gas and natural-gas liquids in the USSR by years-from 1927-28 to 1940 and from -1945 to 1955 are given in Table 1:~ 1Vo effort ha.s been made to esti- mate the production of -these commodities during the World War II years, 1941 through 1944. Also shown in Table 1 are the estimates of the annua)_ production of crude oil in the-USSR and of the total production of petroleum -- crude oil plus natural-gas liquids plus natural gas. A column headed "Total Liquid Hydrocarbons" shows the sum of the production of crude oil plus natural-gas liquids. The estimates and forecasts. shown in Table 1 are based upon the most reasonable evaluations of the meaning of the fragmentary quanti- tative data available in the postwar period.- The possible minimum and maximum values .are based upon the corresponding extreme alternate assumptions concerning these data. Presentation of the fragmentary data, citation of sources, and discussion of the assumptions and their application are discussed in detail in Appendix A. Prewar data in Table 1 are .largely from official sources discussed in Appendix A and cited in Appendix C. LI. Terminology and Technology. Definitions of the terms crude oil, natural-gas .liquids, natural ga.s, and petroleum are given in Appendix A. This appendix also covers the terminology and the technology of recovery of these components from oil and-gas deposits. Briefly, the three components of petroleum, crude oil, natural-gas liquids, and natural gas, a.re intimately associ- ated in all oil deposits and, in exploiting such deposits, are extracted simultaneously from oil wells. In gas deposits (which are exploited by gas wells), only two components occur, natural-gas liquids and natural gas. In some gas deposits producing so-called "dry" gas, only negligible quantities of natural gas liquids are present. In contrast, practically all oil deposits, and-many gas deposits, yield."wet" gas, from which natural-gas liquids can be extracted in sufficient quantities to warrant the processing of such gas. .The processing of wet gas for recovery of natural.-gas liquids may range from simple scrubbers-for 'the recovery of "drip" gasoline, or "lease condensate," to complex modern ~ Table 1 follows on p. 3. S-E-C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 .Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 ,C-I-~ O~ rl m-7 ~O ~~~p} cp0~~ N u~ T rl rM-I ~ N N N N N c11 Om m m m. 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O O ,'. -~1-~ . ~ g +-i ~ ~ +~+~+~+'+'i~-F~-N +~+'+~ 7' to L r-I D\~ ~ O -I N M rl G N [~~ ' m ~ W `~ .d OI Ul N . - O O O-O A.O r-I rl N M I rl N M..~ ~O ap N rl r-I O O O U ~ W~ N~ ~ ~ao~ ~~~ ~ N N '~ q ~ ~ ~ ~i ~ a ~ Fp,, ~ Ww~ OOOOOOr-INM~~ ~ ~ ~~ ~ o o4.i m w ?~ i ~ Lo.~~o~0 0 0 0~~0 a a~ ~c~i N ~t cMnm~~ ~~~ 0 0 0 0 0 0 o a a o 0 N N C~-CO LO~-~ N N r-I C-~O rL-1 ~ N N N cYMi m.~ ~ ~ ~ -7 ,LII -O ~ ~O \O ~O \O ~O ~O \D ~N N N m.M~-7 ~u~~ -~ ~n ~O L~ ~ O r-I N M~ u~ W -~' ..7 -~' ~ 111 lf'~ lf~ l1 L(1 ~ O D\O\Ol a\O\d\~Q\~'\D\~ a ~~~~~~~~~~~ Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E-T plants designed for the selective recovery of the several lighter hydrocarbons comprising the entire range of natural-gas liquids. A brief presentation of these various processes is given in Appendix A. III. US Practice and Data. In the US, specifP'c quantitative data are compiled and published covering the production of each of the three components comprising petroleum -- crude oil, natural-gas liquids, and natural gas, and, since 1846, annual estimates of the proved reserves of each of these three components have been compiled and published by a joint com- mittee of the American Petroleum Institute and the.American-Gas Association. ~* Table 2 shows the annual production of these components in the US for 1946 and for 1953 in millions of metric tons and in percentage by weight of the crude oil. Production of Crude Oil, Natural-Gas Liquids, and Natural. Gas. in the US 1846 and 1953 1946 1953 Quantity, Quantity (Million (Million Component Metric Tons) Crude Oil (Percent) Metric . Tons) Crude Oil (Percent) Liquid Hydrocarbons Crude OiI 235 100.0 316 100.0 Natural-Gas Liquids 13 5.5 32 10.1 Total 248 105.5 348 110.1 Marketed Natural Gas g4 40.0 197 62.3 Total Petroleum 342 145.?5 545 172.4 ~ Footnote references in arabic numerals are to sources listed in Appendix C. -5- S-E-C R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E -C -R-E -T Following is a comparison of the average annual growth in the production of -each of the c-omponents listed in 'able 2, during the period l9~+6-53~ Crude Oil ~+ ? 3 Natural-Gas Liquids 13.1 Natural Gas 11.1 Thus in the postwar period the US production ~f natural-gas liquids has increased at a rate of 3.1 times that of crude oil, and the-production of natural gas has increased at a rate of 2.6 times that of crude oil. Furthermore, this high rate of increase for these two components was from: a relatively high level of output at the beginning of the 19+6-53 period. Several factors account for these high postwar growth rates. -For natural-gss liquids the principal Factor is the low cost -of labor and material required per barrel for the recovery of natural-gas liquids from the gas being extracted from oil-and gas deposits compared with the cost per- barrel of new crude-oil production. Published cost studies indicate-that-the capital investment required per barrel of daily - increase in natural-gas liquids production is ~1,-313 compared with parallel investment of $3,66+ for crude -oil. The postwar growth of marketed natural gas in the US has been made possible by the construction of several new transcontinental natural-gas trunk lines connecting the. sources of supply with large markets for natural gas. IV. Soviet Practice and Data. Russian language texts published in Moscow since 1950 reveal a technological grasp of-petroleum-industry practices comparable with those in the US during the postwar period. The extent to which these :practices have been applied is assumed to depenci-upon the economic advantage to be gained related to the input of labor and materials needed to attain such an economic advantage. A recently published Russian language text for use by the Sotriet petroleum industry gives comprehensive and relevant data on the problems of the gas industry, including the extraction and -6- S -E -C -R-E =T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E-C -R-E-T recovery of natural gas and natural-gas liquids from oil and gas de- posits. This text indicates that technical capabilities to produce these latter components in the USSR compare favorably with such capa- bilities in the US. Table 3 shows the estimated annual production of crude. oil, natural-gas liquids, and natural gas in the USSR for 19+5 and 1953 taken from Table 1, for comparison with similar data for the US shown in Table 2. Table 3 Production of Crude Oil, Natural-has Liquids, and Natural Gas in the-USSR 19+5 and 1953 19+5 1953 Quantity (Million Crude Oil Quantity (Million Crude Oil Components Metric Tons) (Percent). Metric Tons) (Percent) Liquid Hydrocarbons Crude Oil 19?x+ 100.0 x+9.6 100.0 Natural-Gas Liquids 0.1 0.5 3.1 6.3 Total 19.5 100.5 52.7 106.3 Marketed Natural Gas 2.3 11.9 ~+.5 g.l Total Petroleum 21.8 112.x+ 57.2 115.x+ S-E -C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E-C-R-E-T V. Production of Natural-Gas Liquids in the USSR. In Table 3 it will be noted that the estimated production of natural-gas liquids in the USSR in 1953. is .equal to 6.3 percent of the production of crude oil. This is slightly higher than the 5.5 percent shown in Table 2 for the US in 1946 but substantially below -the 10.1-percent for the US in 1953. The rate of increase of the production of natural-gas liquids in the USSR in the postwar period, as reflected by the estimates in Table 3, is high. The production of this component of the production of petroleum in the USSR, however, started from a very low level in 1945. In addition,-the increased production of crude oil in the USSR since 1948 ha,s been almost wholly from new and deeper deposits in which the availability of natural-gas liquids is much higher than in .the older and shalaower deposits which were the principal source of petroleum in the USSR in the prewar years and during the immediate postwar years of restoration and rehabili- tation of the old producing oilfields. -Table 1 indicates an estimated current rate of increase of approx- imately 1 million tons per year in the production of natural-gas liquids in the USSR. This high rate of ncrease-cannot be sustained after the capacity for processing wet-gas withdrawn from the oil, which-has been previously flared (wasted), approaches the quantity of .such wet gas available-for processing. It is estimated that this condition will-develop after 1955 and-that the annual growth in the production of natural-gas liquids in the USSR after that time will trend toward the annual rate of increase in the production of crude oil, rather than maintain the high rate indicated in Table 3. This current annual increase of l million tons per year in-the estimated production of natural-gas liquids in the USSR was first reached ~y the US petroleum industry in 1929, when the increase over 1928 was 1.2 million tons. As early as 1823, however,. the US registered an .annual increase of 0.87 million tons of natural-gas liquids. 4~ .Modern-postwar processing of wet gas for the recovery of natural- gas liquids, as revealed by both US ~ and Soviet_~ technical-pub- lications, shows a very large increase in the recovery of the natural- gas liquids entrained in wet gas. For example, from 1935~to 1951 the yield of natural--gas liquids per thousand cubic feet of gas processed increased 57 percent in-the US. ~ Because of the postwar increase in availability of wet-gas for processing in the USSR, as shown in Appendix A, and because of the very substantial increase in the proportionate recovery of natural-gas liquids per unit quantity of S -E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T wet. gas, a current annual increase of l million tons per year for this component of the production of petroleum in the USSR is a reasonable estimate. Comparison with the known annual increases of the same component in the US in the 1920's supports this estimate. A more detailed exposition of the basis for the postwar estimates of the production of natural-gas liquids in the USSR, as shown in Table 1, is given in Appendix A. DTI. Production of Natural Gas in the USSR. In contrast to the estimated production of natural-gas liquids in the USSR, the postwar production of natural gas has been on a much lower .level, and the annual growth in the production of natural gas has been at a much lower rate. The primary reason for this difference is the high inputs of labor and material required to build the long natural-gas .trunk lines needed to transport to centers of population -the large quantities of natural gas being flared in the oilfields. Table 4 presents the most pertinent data available on natural- gas trunk lines in the USSR. More detailed data.-are given, and sources are cited, in Appendix A. Table 4 Significant Data on Natural-Gas Trunk Lines in the USSR Natural-Gas Trunk Line Year Completed Length (Kilometers) Annual Capacity (Million Metric Tons) Dashava to Lvov 1940 70 0.13 Yelshanka to Saratov 1942 18 0.20 Buguruslan to Kuybyshev 1943 160 0.20 Saratov to Moscow 1946 843 0.37 Dashava to Kiev 1948 513 0.62 Total for Eight Years 1,604 1.52 -9- S -E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R-E -T In 1950 the Buguruslan-Kuybyshev pipe line was looped-(paralleled) with another line, thereby do~ibling its capacity.- The Saratov-Moscow -- and Dashava-Kiev lines were both major projects of the USSR. It is unlikely that additional projects of this size have been .completed since 1948, but it is likely tY~at the capacity of existing trunk lines has been increased by looping, by increasing the number of compressor stations, and, in some cases, by increasing the maximum operating pressures.. -In-contrast, pos-twar.construction of natural-gas trunk lines and branch transmission lines in the US increased from 77,280 miles in .1945 to 118,160 miles in 1952, an average annual construction of 5,840 miles (9,400 kilometers) of such lines. In -1952 the 20 major natural-gas pipe-line systems in the US operated 5T,242 miles (92,122 kilometers) of main transmission lines having a maximum capacity of 15.747 million-cubic feet daily,-which is equivalent to an annual capacity of 135 million-tons of natural gas. 8~ Comparison of these US data with the Soviet data -shown in Table 4 indicates that the over-all magnitude of the natural-gas industry of the US is about. -- 100 times tY~at of the USSR. As the tota_1 1953 production of petrol- eum in the US was 9.5 times that in the USSR, as shown in Tables 1 and 2, it is obvious that the relative position of the natural gas industry in the USSR is abnormally low. The Fifth Five Year Plan (1951-55) 9~ calls for an 80-percent in- crease in the production of all types of fuel gas, including natural gas, during this 5-year period. This increase is reflected in Table 1, with the production of natural gas in 1950 estimated to be 3.9 million tons and in 1955 to be 7 million tons. The Fifth Five Year Plan also requires afivefold-increase in pipe-line transport. The estimates of the production of natural gas in the USSR for the postwar period, 145 through 1953,-and forecasts for 1954=55 are based, in general, on the capacity of the natural-gas-trunk lines completed through 1948, as shown in Table 4, plus reasonable additions to the capacity of such lines in the past 5 years, plus rapidly increasing utili- zation of natural gas in oil-producing regions. In order to meet the goal of the-Fifth Five Year-Plan, an accelerated increase in such activities will be necessary in the 1954-55 year.. S-E-C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E -C -R-E =T APPENDIX A METHODOLOGY 1. Introduction. The methods used for estimating the annual production of petroleum components in the USSR, as shown in Table l,* are completely different in the prewar and, postwar periods. This difference arises from the relative availability of data for these periods. Official Soviet prewar production statistics on the three compo- nents of petroleum production -- crude oil, natural-gas liquids, and natural gas -- are sufficiently complete so that a minor use of con- ventional interpolation and extrapolation methods provides a satis- factory compilation of prewar annual estimates. Postwar Soviet data on petroleum production, in contrast, are very fragmentary and cannot be firmly identified with either the total production of petroleum or the production of crude oil. The data given in Table 1 for the postwar period are the result of an initial analysis of the available data as described in this appendix. As additional postwar data become available and further analyses are made, the postwar data shown in Table 1 should be revised. 2. US Terminology. a. Petroleum. The US Bureau of Mines definition, 19+5 10 is: "Petroleum is an extremely complex mixture of naturally occurring hydrocarbons and other substances that are found in the solid, liquid, and gaseous states. Asphalts and mineral waxes are common varieties of solid petroleum; crude oil is liquid petroleum, and natural gas is a form of petroleum in the gaseous or. vapor state." This definition of petroleuun is the one now most widely used. by US petroletun technologists and is accepted by the American Petroleum Institute. 11/ It is quite different, however, from the S-E-C-R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T definition which was in use throughout the oil industry of the IJS 30 .years ago and is still used in some quarters: "P~troleum: an oily, inflammable, liquid mixture of numerous hydrocarbons, chiefly of the paraffin Series, found in the earth," 12~ The nontechnical usage of the term "petro.leum" has changed in its emphasis in the past l0 years, as revealed by the 1942 and 1953 editions of the Encyclopedia Americana. In 1942, crude oil was emphasised as the most important form of petroleum. The 1953 defi- nition states-that petroleum "appears chiefly in the form of natural gas and crude oil, either separately or in close association or inter- solution with each other." b. Natural Gas.- The current American Petroleum Institute definition of natural gas is as follows:- "Gaseous forms of-petroleum, commonly called 'natural gas,' consist of mixtures of hydrocarbon gases and vapors, the more important of which are methane, ethane, propane; butane, pentane, and hexane,- all of the paraffin series (Cn H2n~8.2)." 13~ c. Natural-Gas Liquids. The currently accepted definition of natural-gas liquids is as follows: "Natural gas liquids are defined as those hydrocarbon liquids that are gaseous in the reservoir but are obtainable by con- densation or absorption. Natural gasoline, condensate, and liquefied petroleum gases fall in this category. In order to prevent misunder- standing of this term it is further amplified as follows: the natural gas liquids are those heavier hydrocarbon components of the natural. gas-which may be removed and reduced to the liquid state by various processes. These processes usually take place in field separators, scrubbers, gasoline plants, or cycling plants. The liquids so c-oll.ected and the products made from them in some of the modern plants are known by a variety of names, but they have been grouped together under the general heading 'Natural Gas Liquids.'" 14~ d. Petroleum Production. In this research aid the production of petroleum applies only to that part of-the petroleum withdrawn from oil and gas wells which is conserved or saved. In oilfields the natural gas produced with the crude oil is frequently flared, or wasted, because of lack of S -E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 } Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E-C-R-E-T demand at the source.. Nearly all natural gas now being flared in the US is either dry natural gas or gas so lean in natural-gas liquids that recovery is not warranted. Gasfields are not developed or produced unless-the market outlet for the gas, is such that the production of petroleum .in the fields is the same as gross withdrawals less minor handling losses and field use. e. Gross Withdrawals. The term gross withdrawals, as used in US Bureau of Mines natural-gas. statistics, 15~ is the sum of the marketed production of natural gas, plus the gas used in repressuring oil deposits in oil- fields, plus the gas vented and wasted. The latter category includes gas flared at field plants .and other measured wastes but does not include, except where data are available, direct waste at the wells. In this research-aid, estimated gross withdrawals of petroleum in the. USSR is the sum of the production of petroleum. plus the total waste. It is assumed, however,-that production of crude oil and gross with- drawals of crude oih are-identical. 3. Soviet Terminology. The Russian word neft', with its various grammatical forms, is al- most exclusively used to express the US terms "petroleum" and "oil." Neft' is translated as either petroleum or oil, and Russian-English dictionaries give both terms without well-defined preference. The. word petroleum is used to a limited extent in Russian literature with the same meaning as its English counterpart. An official US Army publication 16~ gives three English equivalents for neft' -- oil,.crude oil, and petroleum. On the other hand, a recent and authoritative US publication on scientific Russian 17~ shows petrol- eum as the only equivalent for neft' in its Russian-English vocabulary, and neft' as the only equivalent for petroleum in its English-Russian vocabulary. It is obvious that dictionary definitions alone will not show clearly what is meant by the Russian term neft' as used by the Soviet government in its statements on the production of petroleum. Actual usage appears to be the only criterion. Postwar usage cannot be clearly defined, for no concise breakdown-has been given between the , production of oil and the production of gas in the postwar period, as it was in prewar statistics. For example, in the Third Five Year Pls,n (1938-42), 18~ the 19+2 goal is stated in one place as follows: "Crude oil with gas eft' siraya s gazom7 5~E million tons.." In another place appears the following: Production of petroleum (neft') in 19+2 must _ 13 _ S -E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E -C -R ?E -T be 49.5 million tons without gas and 54 million tons with gas." This clearly indicates the use .of rieft' as meaning either crude oil with wet natural gas -- petroleum -- or without- natural gas -- crude oil. What is meant in a given case cannot be determined unless the pro- duction of each component, crude oil and gas, is stated. Another prewar-example of the use -of the.word neft' is signifi- cant because it is used to compare production of crude oil only, in 1-year, with production of crude oil plus natural. gas, in a later year. This practice, if it has been applied to postwar production claims and percentage increases,- can be misleadir.~g. This example is in a political dictionary, or lexicon, 19~ published in Moscow in 19~+Oo It is apparently intended for use by political writers and economists as a reference book. In the brief article on the petroleum Indus-try on page 374, appears the statement: "The production of petroleum (neft') increased from 9.2 million tons in 1913 to 32.2 million tons in 1938, i.e., by 3.5 times. ... In the Third Five-Year Plan ending in 1942 the. production of petroleum (neft') will increase to 54 mil- lion tons, ... 177 percent in relation to the year 1937." According to official Soviet statistics the 1913 production cited in the above passage includes no gas, 20~ and the 1938-figure cited includes nearly- 2 million tons of natural gas. 21~ It is clear from these citations that no .reliance can be placed on what is meant by the word neft' in Soviet official production claims, unless it is accompanied by concise state:ment~ showing the components included. 4. Technology. The normal hydrocarbons .found in natural-ga,s liquids and in natural gas, with their principal physical properties, are-shown in Table 5.~ As reflected in Table 5, the hydrocarbons comprising natural-gas liquids and natural gas occur in both vapor and liquid phases .under . varying conditions of temperature and pressure. 17nder the relatively high pressures found in underground oil deposits, a part or all of these hydrocarbons-are dissolved in the oil and are therefore in the liquid phase. As the oil flows to the well and thence to the .surface, the .pressure drops and liberates large quantities of these dissolved hydrocarbons, so that they appear at the well head in the vapor phase. Table 5 follows on p, 15. - 14 - S-E-C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 o ~ -~ v ~ .-~ ;.. ~ ?' N ~ ~ ~ U ~ al M \O , ~I -f N u] O H ~ O ~ Na0-~ O~ ~ is U cad cn O r-I .-I N c~'t c~'1 ~ ~ ~ U rd m O H ?rl U1 W O cd dU0 ~ ~ ~ m r-I O ~l BOO o~~ ~z~ i m o~m ~ u, ~i ~ c'a'd N ~ ~-- a ~a ~a ~ o rd m ?~ ~ ~ ~ ai HI wl ~ al ~ vl ~ ~ ~ H ~~ ~~~ ~~ r- o ao cYt N m ul ~ ~O ~O C7 cd ~ H .~- of N ~- rl ~ u1 M N O al C~- U ti u1 0 ~1 0 ~' a\ 4~i O F-i O r-I r-I N N N ?rt ?r1 U y' U Lf] ~ --'' U +~ ?rl i"~ ~ ~ w ?ri N O O ,.~ ~ w a ~ ~ ~ ?rl -I~ U] rl a, U] ?r-I a O -+~ F-i pq cd P-~ al ~ .~' H C--~a Lfl N -~' Mal Lfl N r-I t H O O G~~~a ~ cad US'-, cd ~ -~ ~ O Fa ~ ~ Approved For Releas~ 1999/0 8~ ~I~i~~F~9S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E-T - This oil-gas mixture at the well head is discharged into a separator, or a series of separators, where the pressure is reduced to atmospheric pressure. The liquid-phase material resulting from this primary separa- ting process is crude oil, or stock-tank oil. The .vapor-phase material is wet gas which carries varying quantities of natural-gas liquids. 23/ i3ecause of its content of natural-gas liquids, which tend to condense and choke the- line, wet gas as received a.t the well head or field separators cannot usually b_e transported readily for long distances through pipelines. It is therefore gathered in relatively short lines and delivered for processing to natural gasoline plants in or near the field. Simple traps and scrubbers may be used, however, to extract part of the natural-gas liquids-before the wet-gas reaches the processing plant. In 1951 there were in the US 521 plants producing natural-gas liquids. 24/ Although most of these plants are located in or near the producing oil- and gasfields, some new plants are located on natural- gas-trunk lines. These plants reprocess the gas being transported and thereby recover the residual natural-gas liquids not recovered in field plants. One recent plant built at the junction of 2 large natural-gas trunk lines processes annually about 4 million tons of this relatively dry natural gas, from which nearly one-half million tons of natural-gas liquids .will be recovered. 25/ Soviet technology in natural-gas liquids and natural gas closely follows US practice. This is revealed in a textbook on the-gas industry published in 1953 by the Soviet Ministry of the Petroleum Industry. 26/ One interesting and significant departure in approach has been noted in this Soviet text. US technology approaches-the problem with the stock-tank oil as the starting point. The undis- turbed liquid-phase material in-the. oil deposit, which is designated reservoir oil, is related to the stock-tank oil, or crude oil, by a volume-formation factor. Thus a volume-formation :factor of 1.40 means -that, because of the inclusion of dissolved components which are later liberated into the vapor phase in the producing process, 1 bar- rel of stock-tank oil is equivalent to 1.40 barrels of reservoir oil. Soviet technology approaches this problem from the basic concept of reservoir oil (plastovaya neft'). Crude oil is then related to the reservoir oil by a fraction such as O.SO, meaning that 1 ton of reservoir oil contains 0.8 ton of crude oil, and the remaining 0.2 ton being liberated as wet natural gas. 16 - 5 -E -C -R -E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000'F00090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T Initially, many oil deposits have vapor-phase, or "gas-cap," material above and in contact and equilibrium with the liquid-phase material, or reservoir oil. Other deposits, whicri initially have all hydrocarbons in the liquid phase, develop gas caps, or vapor-phase materials, during the producing life of the field because of the reduction of reservoir pressure below the so-called bubble point of the reservoir oil, with resultant liberation of vapor-phase material in the reservoir. In the US, annual estimates of crude oil, natural-gas liquids, and natural gas 27~ show the distribution of the two latter components in oil deposits according to whether they are dissolved in the oil or are associated with the oil as vapor-phase material. Table 6# shows the distribution of these components and the proved reserves in gas deposits, all in terms of percent by weight of the crude oil. Proved reserves of`petroleum components in the US represent the .estimated recoverable reserves of such components from known deposits with .the technology and under the economic conditions existing as of the time of the estimate. This is an important distinction which should be recognized when comparing the US with a country such as the USSR, which has a completely different economic base, even though the technology may be comparable. A competent study 28~ shows that in 1950 US~technology could recover 83.1 percent by volume of the natiLral-gas liquids contained in the natural gas available for pro- cessing, but, because of lack of assured market demand for the lighter hydrocarbons, only x+8.8 percent by volume was actually recovered. Thus only 18.8 percent of the propane was recovered, although 70 per- cent could have been recovered technologically. Only 50.1 percent of the butanes was recovered as compared with a 90-percent recovery technologically feasible. For the heavier hydrocarbons, q0.~+ percent was .recovered, compared with 96 percent technologically recoverable. Since 1950, many plants in the US have been built or modified to .recover larger proportions of these light hydrocarbons. One such plant 29~ will recover essentially all of the propane and heavier hydrocarbons plus ~+O percent of the ethane, which will amount to 100,000 tons per year and will be used for the manufacture of various chemicals, It is estimated that, as of 1950, Soviet oil deposits carried about -the same distribution of natural gas and natural-gas liquids as those in the US, as shown in Table 6. Because of lack of a system of natural- gas trunk lines comparable to that in the US, however, the relative ~ Table follows on p. 18. S-E-C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T Table 6 Distribution of Proved Reserves of Petroleum Components in the US in Terms of Percent by Weight of Crude Oil 1946,. and 1952 Component 1946 1952 Crude Oil 100.00 100.00 Natural-Gas Liquids Dissolved 3.09 4.88 Associated 2.06 2.07 Total 5.15 6.95. Natural Gas Dissolved 14.92 18.72 Associated 21.52 19.3 Total 36 ? ~+~+ 37.85 Total Oil 141.59 144.80 was Natural-Gas Liquids ---r 6.93 6.49 Natural Gas - 96.14 84.-84 Total Gas 103.07 91.33 Total Petroleum. 244.66 236.13 Total Reserves a~ Crude Oil 100.00 100.00 Natural-Gas Liquids 12.08 13.44 Natural Gas 132.58 122.69 Total Petroleum 241+.66 236.13 a. From both gas and oil deposits. S-E-C-R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E -C -R -E -T proportion of developed natural-gas deposits in the USSR is far below that of the US. For the same reason, the production of natural gas -- the natural gas actually recovered and utilized -- in oilfields is far below current US production. Oilfields in the USSR before World War II were mostly the. older, shallow fields in which the proportion of natural-gas liquids and natural gas was much lower than it is in more recently developed fields. An ever-increasing proportion of the Soviet petroleum production is from the new, deep fields in the Ural.-Volga basin and from deeper de- posits in the old producing areas. This changing condition is reflected in Table 7,* showing distri- bution of petroleum components in the USSR in percent by weight of crude oil for selected years. In order to indicate the range of vari- ation of those components, the same-data for recent years in the US as a whole and for selected oil-producing states are also shown. The Soviet data in Table 7 are derived from Tables 8~~ and 9.~~ It will be noted that the 1952 US data on production and withdrawals of petroleum components in Table 7 check closely with the distribution of the proved reserves of such components in the oil deposits of the US, as shown in Table 6. 5. Transportation and Utilization. This research aid is concerned primarily with the production of natural gas and natural-gas liquids in the USSR, and aside from limited data on natural-gas trunk lines, no quantitative data are presented on the transportation and utilization of these components. Certain significant qualitative data will be presented in this section, however, as an aid in appraising the validity of the estimated distribution of the production of natural-gas liquids and natural gas in the USSR as shown in Table 1.~'~'~' Practically all the gas produced in the USSR prior to World War II was produced in oilfields and used in nearby localities. 29~ Some of the gas was processed for the recovery of natural gasoline, but the lighter propanes and butanes were not recovered. Most of the natural gas and natural-gas liquids were wasted. * Table 7 follows on p. 20. ~~ Table 8 follows on p. 25? ~-~-~ Table 9 follows on p. 30. -~~~~ P . 3, above . - 19 - S -E -C -R-E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 r~ ~~~~ o~ o E ~ N~Ny Cp Quin rl ~~MN~O c~rl~~~~ w~~om ~~~.i ~.i~.a~ O~ O~ ~pn~ ~n n~~'{{EpOr~]i -M .-I ~O C-~O ~~ NNMf~'1 N~~~M m,-I ~oNr~6 ~aea4 '~~'~'~0~~ zzzzz m c+-~ m.~ ~-i 4. - d 4 4 d C NN~rMI rM-I Ri 7-~Y~. ki k'i f~ 088888 00888 rl r~ r-1 rl rl rl rl rl ri rl ri ml WI~ ~O ~n pap0 ~-1 (O~ L`- rl O M~ O rO1 ~Oi~~ri rMi -r~`I r~-I r~i~~ml rnc0 ~D o] ri N ~O c0 ~O m O N ~D ~O L`-~ N ~ m m ~ c?pi m c-~ mrno ~n mm ono O J N N ~D N O~ CncO N l0 888888 88888 00 O ~n~N M NN ~(~ r~iri~~.~-Ir~i Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E-C -R-E-T Wartime and postwar construction of natural-gas trunk lines (see Table ~+*) has provided a means for developing and utilizing some of the gas deposits of the USSR and has provided an outlet for increased quantities of natural gas from oilfields. Because of the greatly in- creased withdrawals of natural gas in the postwar period from the newer and deeper oil deposits, however, it is estimated, as shown in Table 9,*# that the current percentage of oilfield gas conserved and utilized is actually lower than it was in the immediate prewar period. This condition cannot be remedied until additional natural-gas trunk lines are completed. With respect to natural-gas liquids, the picture is different. There is a fair volume of fragmentary data indicating that, in ad- dition to the production of natural gasoline in the USSR, there is a rapidly expanding utilization of liquefied petroleum gases. These are the lighter components, mostly propane and butane, which were not recovered in the prewar period in the USSR. As these lighter natural-gas liquids, usually designated as LPG, can be distributed only in pressure containers, their distribution is occasionally noted in intelligence materials. Therefore, they serve as a valuable indicator of the total production of natural-gas liquids, as the pro- duction of natural gasoline is a necessary part of the recovery of the lighter hydrocarbons comprising the LPG. The following citations are representative of the fragmentary intelligence on the distribution and utilization of liquefied petroleum gases (liquid gas or LPG) in the USSR. It is offered merely as qualitative evidence and without analysis or evaluation. Date of Information Item 19+8 ~ P. 9, above. *~ P. 30, below. A 1576b FDD u-3088, "Motor Vehicles Operating on Gas-Filled Cylinder.1? C. Source: Mashinos- troyeniye, Vol. 11, 19+8. Two types of cylin- ders are used, low pressure for LPG at 16 atmospheres, and high pressure for compressed gas at 200 atmospheres. Data given on tank weights, performance, and the like. S -E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T Date of Information 19+9 Trud, No. 170, Moscow, 21 Jul lg~+g. U. Calls for increased distribution and use of LPG and compressed natural gas. Trud, No. 27~+, Moscow, 23 Nov 1951. U. De- scribes Baku LPG station for servicing railroads. 1952 Kommunist, Baku, 4 Jan 1952. U. Describes establishment of first LPCx station for servicing motor vehicles. 1952 1952 Auto-Motor, Budapest, 15 Nov 1952. U. De- scribes apparatus reportedly in use in the USSR for converting motor vehicles to use of LPG. 25X1A2g 2 Mar 1953. C . Review of 25X1 A8a natural gas resources by Academician Chudakov points toward greatly expanded use of LPG and compressed natural gas for all types of mobile transport. 1953 Izvestiya, "Gas Installations in Cities," Moscow, 18 Nov 1953? U. Reviews growth of gas distribution and utilization and states that servicing of various cities and settle- - ments not reached by gas pipe lines will be done by LPG in cylinders. S-E-C -R-E-T Approved For Release 1999/09/08 ~: CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T Date of Information Item 1953 ~ Pravda, Moscow, 26 Nov 1953? U. Amplifies dis- cussion irk foregoing item naming several cities to be served by LPG and adds "A large number of special railroad and trunk tank cars as well as steel spheres are to be built in 1954 for sup- plying liquid gas." 1953 CIA 2109636, WDGS R-1332-53. C. Gives details -for operating on compressed gas the.Soviet GAZ-51-B truck which is offered for export. 6. Prewar Data. As a whole, Soviet statistics on prewar petroleum production pre- sent no serious difficulty in their interpretation. This is partic u- larly true of the official compilation of statistics covering the period 1927-28 to 1935, published in 193.6 in a single-volume (Socialist Con- struction in the USSR), which has been fully translated. 30 The method of presentation of statistics on petroleum production in this volume is typical of the method followed by the USSR in the prewar years, including the period 1936-40, although the data are less com- plete in these latter-prewar years. The first 40 pages of this 538-Page volume are devoted to general tables covering the social and economic growth of the USSR over the previous several years. These. data are those most widely quoted in the press and in general economic articles. The first and most important entry for petroleum production is in Table 1, "Principal Indices of Socialist Construction in the USSR," where on page 5 under the subheading "Industry," appears "Output of crude petroleum and natural gas" with the total quantities by years shown in thousands. of metric tons. In Table 2, "Summary of Large-Scale Industry as of 1934," on page 42 under the subheading "Fuel Extraction" are four entries: 1. coal mining, 2. crude petroleum production,. 3. peat extraction, and ~+. combustible shales. As there is no separate entry for natural gas production, it appears that in this case crude petroleum production includes natural ga,s. This tends to be verified by the entry for 1934 in Table 1, "Summary for the Petroleum Industry," page 135, where the gross output in millions of rubles for crude. petroleum production is shown as 589, _ 23 _ S-E -C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E-C-R-E-T which checks with the similar entry~on page 42. Here, also, there is no entry for the value of natural gas production only. Thus far in Socialist Construction in the USSR 1936, some ambi- guity has appeared in the meaning of the term crude petroleum production" when it is related to such items as value of gross output, .number of, wage earners, and the. like, but it apparently covers both crude oil and natural gas with the entrained natural-gas liquids. This ambiguity is resolved in-Table ~+, "Output of ,Petroleum Products in Physical Units," on page 138. Most of this-table covers refined petroleum products which are so designated under a subheading, but the first three entries are "crude oil," "natural gas," and."total crude oil and gas." The quantities under the last entry-are the same as those under "Output of crude petroleum and natural gas" in Table 1 on page 5. As there is in Table 4 no separate item far natural-gas liquids, it is obvious-that natural gas in this table is wet natural gas before the extraction of the natural-gas liquids. This latter item is accounted for in Table 6, "Output of Petroleum Refining Industry," on page 1~+0, under the designation "Ben.zine obtained from natural gas. Thus the production of the 3 components,-crude oil, natural-gas liquids, and natural gas, comprising the total petroleum production in the USSR, can be definitely identified for the period covered by this official publication. One additional column entry of interest in this same volume, Socialist C-onstruction in the USSR 1936, is in Table 11, "Oil Extrac- tion: By Methods, page 1 3, under the column entitled "Total extraction of petroleum," which-shows the same quantities as are given for crude oil only in Table 4, page 138. This entry indicates that, despite the other entries which indicated the-inclusion of natural gas, petroleum can mean crude oil. The main title of Table 11,."Oil Extract- ion,~however, reduces the significance of the columnar heading, "Petroleum," within the table and is an indication that natural gas is excluded. -Table 8~ presents the estimates of prewar -data on production of petroleum components in the USSR by years from 1927-28 to 19+0. Sources of data are summarized as follows: Table follows on p. 25. S-E-C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 [~ I W I a1 Y~ wl ~I .-~ ~ m O C- O ~ N c~'1 O ~ m~ a0 ~rM-I~ N ~~ NN~NOMO -v NNU~INO~~~O~~Ml~~O~~ M 0 0 0 0 0 0 0 0 0 0 0 0 0 v NNt~nN~a~O ~D~~~~~~ ~,,Mj~N NNNNNN MtC+lm ~~pp pp (~~ ~ n~'1m MMMM Mt~'1 M.3 'N-Il~ri~NNC~immMmnlm .-. MOJ In rl lO O L`- NcO~~ t O C- v~ T-3 u~ (~- OO~~ o v r-I v~.3 N O O~ ~ M L~ ;W N. N M-Y' .~' -? -y' .~' u1 ~ lf1 In Ifl O~ O M N OWN N N.'~' l0 oIn~ rl ol(]~ M ~N{{~ ~~ ri~~y~c0~-3 N V~~ .-I rMl~ NNNNNN~mmmNl F ~ H ~i q u W ~rOi ~N~ H b # ~Nr~i~~ppNppN ~~O~W~O ~ N N -7 OD M u~ rl .-1 rl ri ?-I ri N v O O O O~~ N~ N N N N N ~ti~~~~~~~~~~~ v N N -y rl r1 ri ri rl r1 N 0 .aI~HH N v u d H .N o o +~ H +~' d w~ Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E-C -R-E-T The data iri lines l to 8 inclusive, columns 1 to 6 inclusive, are copied or derived by simple computation from source _31/. .Lines 1 to 8, column 7, are copied directly from source 32/, and columns 8 and 9 are simple additions. The basic data on production of crude oil in line 9 and lines 11 to 13 are from source 33/, and the basic data on production of crude ail and total production of petroleum in line l0 are from source 34/. The total gas production, line 10, column 8, is derived from source 35/ and the remaining data in lines 9 to 13, columns 1 to 9, are by addition, interpolation, and extrapolation. The--data in lines 1 to l3, columns l0 to 13, are derived from reserve data in source 36/ for 1935 (line 8), and the remaining years are estimated on this same pattern of distribution, varied according to the annual production of crude oil in column 1. These data on gross withdrawals are used as a guide in interpolating and extra- polating data not otherwise available in the remainder of the table. Data on the production of natural-gas liquids in 1940 (line 13, column 3) are from a secondary source 37/ which .Cs considered acceptable for prewar data. Official Soviet quantitative postwar data on petroleum production are limited to the 1950 target for the Fourth-Five Year Plan (1946-50), claimed fulfillment for 1950, goal for 1960, annual increases in 1951, a.nd production in 1952 and 1953. These quantitative data are supple - mented by claimed percentage increases over prevzous years. These quantitative data are summarized as follows: a. 1950 target for the Fourth Five Year:Plan was stated to be 35.4 million tons of neft' and 8.4 billion cubic meters of natural gas. 38/ b. 1950 target was fulfilled 10 December 19j0-.and was exceeded by 2.2 million tons of neft' by the end of 1950? 39/ c. 1960 goal of 60 million tons announced_in Stalin's speech of 9 February 1946. 40/ -26- S-E -C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T d. 1951 statement by Beriya that annual increase in output had been 4.5 million tons in recent years. 41/ e. 1852 statement by Malenkov to the 18th Party Congress that 1952 production would be 47 millior_ tons and that the 3-year increase X1949-51) in extraction was 13 million tons. 42/ f. 1953 Production of 52 million tons cited in manifesto of the Central Committee of the Soviet Communist Party, 10 February 1954. 43/ The 1955 target for the Fifth Five Year Plan has been officially stated only in terms of an 85-percent increase over 1950. 44/ The principal discussion of the-Plan directives for the petroleum industry was in the speech by N.K. Baibakov, Minister of the Petroleum Industry, on 11 October 1g52. 45/ It may be significant that the only quanti- tative references in this speech to petroleum production were from the Stalin goal announced in 1846 of 60 million tons by 1860. In Baibakov's speech, there are 3 separate references to this 60-million- ton goal, stressing that it would be reached ahead of schedule. The 60-million-ton goal announced by Stalin in 1846 appears to have been, and to continue to be, the chief goal of the Soviet petroleum industry. It is even reported to have been the subject for the Soviet postage stamp showing an oil-well derrick and the slogan, "60 million tons of oil annually." 46/ It has-been widely assumed that these quantitative data on petroleum production in the USSR refer to the output of crude oil. In view of the Soviet prewar practice of reporting total petroleum produc- tion crude oil plus natural gas) as the primary output statistic for the industry, there does not appear to be sufficient evidence to justify this conclusion. It appears probable that the practice of assuming that these Soviet postwar petroleum output data were on crude oil only originated with a 31 January 19+7 American Embassy despatch from Moscow 47/ which read, in part: "Total production of crude oil in 1845 was 1qT+ mil- lion metric tons, excluding gas. LSource: Baku Worker, 29 May 1846_7" Reference to the source cited in this despatch 48/ reveals it to be a three-column newspaper report quoting M.C. Koslov, Deputy Minister of the Petroleum Industry of the Southern and Western Regions of the USSR. All but one paragraph refer to regional and district plans. The one paragraph which refers to the Soviet Fourth Five Year -27- S -E-C -R-E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E ~C -R-E -T Plan for the entire petroleum industry is translated as follows: "The great Stalin Plan task, .said Comrade Koslow, provides for the 5-year period an increase in extraction equivalent to 13 prewar years. The average annual increase comprises 3.2 million tons, as compared to 1.4 million tons in the First Five Year Plan grid 1.1 million tons in prewar years." The quantity of 19.4 million tons for 194> quoted in the-American Embassy despatch from Moscow was derived from the statement in the Baku Worker by subtracting 5 annual increases of 3.2 million tons each, ~r lb million tons, from the 1950 goal of 35.4 million tons previously announced for the Fourth Five Year Plan. Identifying this 19.4 million tons as crude oil, however, must have been based upon some other source. The comparisons given in the Baku Worker to prewar production-cannot be positively identified either with the production of crude oil only or-with the total production of petroleum. During -the 13-year period ending in 1940, the Soviet annual production rate increased 20.4 million tons for crude oil and 22.4 million tons-for total petroleum. Neither of these figures is equivalent to the 16- million-ton annual production increase planned for the 1946-50 period. During the First Five Year Plan (1928-32), the average annual pro- . duction increases were 2.23 million tons fvr-crude oil and 2.36 million tons-for total petroleum. Neither of these figures checks .with-the 1.4 million tons attributed to this period in the Baku Worker. Selected prewar years will give the l.l-million-ton in- crease cited in the-Baku Worker for both crude oil (1935-40) and total petroleum (1932- 0 On the basis of the :source cited in the Moscow despatch, there appears to be no definite justification for assuming the 1945 production of 19.4 million tons is crude oil only, without gas. The fact that the Fourth Five Year Plan (1946-50) carried separate quantitative goals for neft' (35.4 million tons) and natural gas (8.4 billion cubic meters) carries an implication that they are separate quantities. Because of the Soviet prewar primary reporting practice of converting gas volumes to weight (metric tons) and adding this to the crude oil, however, there is some doubt as to whether the 8.4 billion cubic meters of gas is included in tPie 35.4 million tons of neft' or is over-and above that quantity. S -E -C -R-E -T Approved For Release 1999/09/08 :.CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 5 -E -C -R-E -T A search has revealed one publication 49~ indicating that the 8.4 billion cubic meters. of natural gas should be added to the 35.4 million tons of neft' in order to obtain the planned goal for 1950 for total petroleum production. Table 3 on .page 19 of this source shows growth of fuel extraction in the USSR. A column for the 1950 plan shows for oil and gas (neft' i gaz), 43.8, and a footnote states, "In numerical value, oil 35. m+r illion tons and gas $.4 million cubic meters." The footnote is in error, as it should read billion (milliard) instead of million (million) for the cubic meters of gas. This error-plus the fact that the author has added weights and volumes together may throw some doubt on the validity of his data, but there appears to be no doubt that in obtaining the total goal for the Fourth Five Year Plan, he intended to show these two petroleum com- ponents as additive. In order to establish a basis far estimating postwar production of petroleum components in the USSR, the following assumptions have been made: a. That the 1950 goal of 35.4 million tons of neft', and the over- fulfillment of this goal to the amount of 37.6 million tons for 1950, represents crude-oil production only. It should be noted that the basis for this assumption, as given in the foregoing analysis and citations, refers exclusively to the goal of 35.4 million tons, and not necessarily to tie fulfillment of 37.6 million tons. b. That the .1955 goal of an 85-percent increase over 1950 refers numerically to 37.6 as a base, and therefore indicates a goal of 9. million tons of neft' for 1955 c. That the 1955 goal, derived as in b, above, at 69.6 million tons, represents total petroleum production -- that is, crude oil, plus natural-gas liquids, plus natural gas. d. That the 60-million-ton goal announced by Stalin in 1946 for attainment by 1960 (or before) refers to crude oil. On the basis of these assumptions, supplemented by estimated gross withdrawals of natural-gas liquids and natural gas from oil- fields, by estimated gasfield gas production based on natural-gas trunk line capacities, and by other fragmentary data cited, the estimates and forecasts of Soviet postwar petroleum production by components have been derived and are shown in Table 9.~- ~ Table 9 follows on p.,,30. -29- S-E-C-R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 A q q +~ o O .a .~ H al '~i vOi v }~i r{ I O Fi~H w o ?~ N .~d H o W ~m m Nap ~ ~~ O m ~n..7 N ,-i r-I N rl ri ri r-I N M.3 in~0 N WO~L~L OHO UFO NNL~ - ~-1 O O~ N m v~ in~0 ~O N [~ ~~ M m N N R ~~ ~ N ~o ~o ~ ti~ ~ m in~p eo 0 v m.~ ~O N O~ rl N m.~ In [~ .i rl rl ri ri rl ~~iQn~m D\mOONri ~O ~ ~ N N m m ~ .S ~ If ~O ~ ,-I t+1~0 N v~ N Q\ N n"1 In to O o ~ NNmmm m.3 ..#-~~N u~ N O~ O N ~ C-c0 O~ N i.n v OO O.-i rl 'i rl~ riN N a0 rn m ~n in in v~ u-.~O m i.r~ ~ r-I ri N N N N N N N~tn~ u~ ,0,...{{~ m Wpp~~ N -7 CO L~ C-~O ~D ~NNNM~m~~ N~~n~ rl N M.# ~D N N ri-ri O O E v OOOOOOrIN M-3 ~ w ~ ~ H ~ al~p'11.a lP lp l ~z.~, ~ m oooooo~~-+~~N H W ~ 0 0 0 0 0 0 0 0 0 0 0 N }> ~ N ~ ~ W Rf O '~~~ ~ ? ~ v .1N m.7 i0 c0 riO OO~N 7. O W ~ O 00000 rl NAM n'i.~ N ~-1 ~ o in NCO OHO r-I N m..1 u~ ~~~~~010~1~0~~~~ r-I rl ri r-I ri r-I ri rl ri rl ri q a G LUi W N q q u o ti +~ v a u .~ ~N rml N ~ oop~ 9 OOO N ~qJ ~ U N U1 m H ~9 .W- w .# NO ~'~O ~D ~O ~D l0 ~D ~O 0\ rf ~O Q~ ~`'1 [~- ri ~n O~ cry L~ Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S-E -C -R-E -T This methodology provides what appears to be a reasonable balance between the three components of petroleum production -- crude oil, natural-gas liquids, and natural gas -- in the postwar USSR, con- sidering the probable economic capabilities to find, develop, and utilize-these components. With respect to production of crude oil (column 1, Table 9), this method gives a relatively constant net annual increase after 1948, when the postwar restoration of the old producing properties is thought to have been largely completed. After that time, a constantly increasing proportion of Soviet petroleum production has come from new fields, resulting in the steady increase in annual percentage de- cline~caused by depletion. This has demanded a constantly increasing effort on the part of the Soviet petroleum industry to overcome depletion and to gain a constant net increase in production, as shown in Table 9. There are insufficient data on postwar depletion of petroleum deposits in the USSR to compute-its exact effect, but by analogy with US experience 50/ the data in-Table 10~ present an estimate of the effect of such postwar depletion on the gross annual increases required in order to meet the estimates of the production of crude oil given in Table 9. Thus, as indicated in Table 10, because of the effect of deple- tion, the effort required to maintain a new annual increase of 4 million tons in 1955 is approximately double the effort required for the same increase in 1948. The estimates of postwar production of na.tuxal-gas liquids from oilfields (column 2, Table 9) are based- upon .estimated gross with- ctrawals of this component, shown in column 12, Table 9, and the a~- sumed effect of the conservation or "hermetization" program, which has been actively pushed since 1949-50. Large losses of natural-gas liquids were recognized before World War II 51/ and were again mentioned immediately after the war. 52/ Hermetic sealing of oil wells was planned on a wide scale in the Fourth Five Year Plan. 53/ Beginning in 1949, 5~?/ there is increasing evidence that conservation of natural-gas liquids has been Widely applied. 55/ This is re- fleeted in the estimated percent recovery of available natural-gas liquids. noted in column 13, Table 9. The recovery of natural-gas liquids from the relatively dry natural gases produced in Soviet gasfields is assumed to be negligible, as indicated in column 3, Table 10 follows on p. 32. S-E-C -R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R-E-T Estimated Gross Annual Increases Required in Crude Oil Production in the USSR 1945-55 Assumed Annual Decline Caused by Depletion Year __ Production of Crude Oil a/ (Million Metric Tons) Per- cent Quantity (Million Metric Tons) Net.Annual Increase (Million Metric T ) Indicated Gross Annual. Increase Required ons _ (Million Metric Tons) 19!+5 lg . 4 10 1946 1947 21.7 6 10 1.94 2.3 4 2 1948 2 .0 4 10 2.17 4.3 . 6 1949 29. 33.6 10 11 2.60 3.4 . 6 0 1950 37.6 12 4 0 7.4 1951 41.6 13 . 3 4 8 4.0 8.0 1952 45.6 14 . g 4.0 8.9 1953 4g.6 15 6 84 4.0 9.8 1954 6 53 . 4.0 - 10.8 1955 . 6 15 7.44 4.0 11.4 n 57. 15 8.04 4.0 12.0 rom Table 9, P? 30, above. Table 9, and shown in more detail in column 10, Table 11.E The avail- ability of natural-gas liquids shown as "Propanes and Heavier" in column 8, Table 11, is based on published analyses of natural gas from Soviet gasfields. 56~ The postwar estimates of natural-gas production in the USSR shown in column 8, Table g, are based on a 19+5 figure derived from an un- official Soviet source. 57~ This source stated that the 1950 goal for the production of natural gas was three times the 19+5 production. This statement indicates a 19+5 production of one-third of 8.~+ billion cubic meters, or 2.8 billion cubic meters. This author also stated P. 3~eiow. S-E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R -E -T that the 1950 goal for production of natural gas was 4.5 billion cubic meters, indicating a 1945 production of only 1.5 billion cubic meters. The higher estimate of 2.8 billion cubic meters, however, is used for 1945 and is equivalent to the 2.3 million :tons shown in Table 9, line 1, column 8. The remaining estimates of total produc- tion of natural gas, in column 8 for 1946 through 1953, are based on the official Soviet claims of percentage increases for each year over the preceding year. 58/ The increase for the full year 1953 i~ based upon the first 6 months, as the official announcement of ful- fillment of the 1953 Plan failed to mention natural gas. 59/ Fore-? casts of production of natural gas for 1954 and 1955 are. extrapolated to meet the Fifth Five Year Plan increase of 80 percent, or 7 million tons in 1955? To attain-this forecast of production of natural gas in 1954 and 1955 will require substantial expansion of natural-gas trunk-line capacity.- According to the Fifth Five Year-Plan, in 1955 the "conveyance by pipeline should be approximately fivefold" that of 1950, 60/ so this 1955 goal for natural gas may be attained. Table 11,-~ sho~~ring data on natural-gas trunk lines in the USSR, is used as a basis for estimating that portion of natural gas produced in gasfields_and shown in column 7 of Table 9. Then the natural gas produced and utilized from oilfields is the difference between columns 7-and 8, which is shown in column 6, Table 9. The data. on natural- gas lines in the USSR shown in Table 11 have been drawn from various .sources. 61/ They are intended to be used only as a basis for esti- mating Soviet production of natural gas from gasfields and do not represent a complete survey of gas pipe lines in the USSR. The gross withdrawals of natural gas and natural-gas liquids from oilfields, shown in columns 10 and 12, Table 9, correspond t,o the prewar data in columns 10 and 12, Table 8. There are no postwar data on proved petroleum reserves in the USSR, however, so these gross withdrawals-have been estimated as follows: For 1950, it was assumed that the gross withdrawals from oil- fields in the USSR of wet natural gas -- natural gas plus natural-gas liquids -- was about 43 percent by weight of the crude oil. This is substantially the same distribution as is shown in Table 6-~ for oilfields in the US. This 1950 distribution'is continued for the years 1951-55. For 1945.the gross withdrawals of natural-gas liquids plus natural gas represent 23 percent by weight of crude oil. -~ Table 11 follows on p . 34 . ~* P.18, above. S -E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 o Oti~~O~ .?I ~ Nr~-~~h-a~0 ~I NOO~N~ ~NNm~D O~ r- r-I Nv~NgC~O -0 ~ N N u~ O~ N ~ c~?1 v 4 6 N m O d zz z +-'~ O N n> ~ O v -~~#~~ N ~~ ~~~~ Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E -C -R-E -T This. is slightly higher-than is shown in Table 8 for 1940 and recog- nines the increased proportion of production from the Ural-Volga fields in 19+5. The grass withdrawals of natural gas and natural-gas liquids, as a percent of the weight of the crude oil, is interpolated for the years 1946-49 between the values for 1945 and 1950. The weakest point in this method is the assumption that 1950 gross withdrawals of petroleum components from oilfields in the USSR follow the same pattern as in tree US. There is, however, some justification for this assumption. Based on the average weight of wet gas produced in Soviet oilfields of 1.267 tons per thousand cubic meters,: as derived from published gas analyses, 62~-the average gas ,factor corresponding to production of wet gas equivalent to ~+3 percent by weight of oil, is equal to 300 cubic meters of gas per cubic meter of oil. A reference dictionary for petroleum engineers and geologists published in Moscow in 1952 63~ defines the gas factor as the quantity of gas in cubic meters produced with 1 cubic meter of oil.- This .authority states that large gas factors are character- istically of the order of 1,000 to 2,000 cubic meters of gas per cubic meter of oil, and even higher. It adds that very often gas factors are 100 to 200, and with the very small quantities of gas in the de- posit, the gas factor may be 5 to 10 or lower. With an ever-increasing proportion of Soviet production of crude oil coming from the newer and deeper deposits, .with their characteristically high gas-to-oil ratios (US terminology), or gas factors (Russian terminology), the assumption on which the gross withdrawals of natural gas plus natural- gas'liquids are estimated in Table 9 is probably justified. The distribution of gross withdrawals between natural gas and natural-gas liquids, shown in Table 9, is based on rather complete published analyses of natural gases in the USSR. 64~ 8. Range of Postwar Data. The estimates of the postwar production of petroleum components in the USSR, shown in Table 9, are based on certain assumptions which have been stated in the foregoing analyses of these data. TYiere is no way to test the absolute validity of those assumptions. Therefore,. it is desirable to present the minimum and maximum values which would result from the extreme assumptions which might be made each way concerning the fragmentary data on postwar petroleum production in the USSR. These extreme assumptions are: 5-E-0-R-E-T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 S -E-C -R-E-T Maximum Values: all claims and goals referring to production. of neft' in the .USSR apply -exclusively to "the production of crude oil; .Minimum Values: all the foregoing claims and goals apply ex- clusively to petroleum production --.crude oil, ,plus natural-gas. liquids, plus natural gas. By retaining the basic distribution pattern between components developed in Table 9~ the data shown in Table 12~ have been computed for maximum and minimum values in accordance with the extreme assump- tions described above. The estimated values shown in Table 12 are those derived in-Table 9. As more data on the production of petroleum i.n the USSR in the postwar period become available, and as available data are subjected to additional analysis, the-estimates presented herein will be revised.. Tt appears unlikely, however, that future revisions will fall outside the minimum and maximum limits, shown in Table 12, for crude oil or total petroleum. Future revisions of the production of natural-ga.s liquids and natural-gas, particularly for the 195+-55 forecasts of prbduction of natural.-gas, may depart substantially from the values shown. ~ Table 12 follows on p. 3'7. -36- S -E -C -R -E -T Approved For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 Approved -For Release 1999/09/08 :CIA-RDP79S01046A000100090001-1 N O Q! ~ Ul ~~ H ~ ~ 093 P .~ m O a ~~ H +~ w '~ ~. O rl N M -y' ~ N rl ~1 CO O~ O ...~ OOOOOOr-I r-IN min ~ ~I ~o r~ H -~ N a '~ 7-~ OI H +~' w c7 z ~ ~ ~o ~ cp in in m Orn m _~ \O rn i.t~ ri ._.. rf .~ O~ ri C- N ti m O~ ~-I .~ CV N N