SAMOTLOR OILFIELD: PROSPECTS FOR A FADING SUPERGIANT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00283R000100020004-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 22, 2016
• Document Release Date: December 29, 2009
• Sequence Number: 4
• Publication Date: September 1, 1983
• Content Type: REPORT

Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Directorate of Top Secret
Intelligence
Samotlor Oilfield:
Prospects for a
Fading Supergiant
NGA Review Completed
Top Secret
September 1983
Copy 298
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Directorate of Top Secret
Intelligence
Samotlor Oilfield:
Prospects for a
Fading Supergiant
This paper was prepared by
Comments and queries are welcome and may be
directed to the Chief, Resources Analysis Branch,
OGI,
Top Secret 25X1
GI 83-10196J
September 1983
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
Summary
Information available
as of I August 1983
was used in this report.
Samotlor Oilfield:
Prospects for a
Fading Supergiant
output.
if Samotlor-the flagship of the Soviet oil industry-is the USSR's largest
and most prolific oilfield. Production from this supergiant grew from a
modest 15,000 barrels per day (b/d) in 1969 to a peak of nearly 3.2 million
b/d in 1980. The field was singularly responsible for the spectacular
growth in Soviet oil production in the 1970s and at its peak accounted for
25 percent of national production and about 50 percent of West Siberian
Samotlor's production is now declining.
Our engineering
analyses indicate that-in spite of the massive investment effort that the
Soviets are now making in the field in the form of drilling and fluid lift-
future annual declines could range from 10 to 15 percent. If so, production
could easily drop
The Soviets are attempting to slow the rate of decline temporarily with an
expensive gas lift system purchased from France and augmented with
equipment from Japan. Analysis
can do is halt or moderate the current decline for a year or two.
behind schedule and that the system is plagued with serious operational
problems. Even if the Soviets succeed in getting the entire system installed
and running properly, our reservoir simulations suggest that the best they
dhows that installation of the gas lift system has fallen far
become more difficult.
Samotlor's waning performance highlights the fundamental dilemma
Moscow will increasingly face as the decade progresses. The field has
joined the growing list of large giant and supergiant Soviet fields that were
the mainstays of the Soviet oil industry during the last two decades but
whose outputs are now faltering. To the extent that the Soviets plan to
avoid any downturn in national oil production this decade, they must
simultaneously:
? Continue increasing their investment in these aging but essential fields to
keep ongoing declines to a minimum.
? Commit themselves to a massive effort, particularly in West Siberia, to
find and develop enough smaller-and usually less productive-fields to
offset lost production from the mature giants.
To date, Moscow has been succeeding at this, though at enormous and
spiraling cost. With Samotlor now in decline, however, the task can only
Top Secret
GI 83-10196J
September 1983
25X1
25X1
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
Figure 1
West Siberian Basin: Samotlor Oilfield
Nizhnevartov
Fedorovo Arch
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
Samotlor Oilfield:
Prospects for a
Fading Supergiant
25X1
25X1
Background
No Soviet oilfield-past or present-has had larger
reserves or produced more oil in a single year than
Samotlor. This immense supergiant in West Siberia
probably contained recoverable reserves of more than
15 billion barrels ' of oil when put into production in
1969 and still ranks easily as one of the 10 largest
fields in West Siberia has rapidly increased.
During the 1970s Samotlor quickly became the
Soviets' premier oilfield and was singularly responsi-
ble for the rapid growth in Soviet oil output during
that decade. By 1980 Samotlor was yielding about 25
percent of total Soviet oil production and accounted
for about 50 percent of West Siberian oil output. In
the three years since, however, the role of Samotlor
has waned while the relative contribution of the other
Until recently, Western analysts were confused by the
post-1977 production record for Samotlor. This confu-
sion came about because of the management structure
for the field-which is split between two separate
production associations-and the deliberate vague-
ness and ambiguities in Soviet statements.
tions to keep output growing through 1986.
production from Samotlor peaked at the end of 1980
and has continued to decline in spite of Soviet inten-
Field Development
The Soviets discovered Samotlor in 1965 when crews
struck oil while drilling an exploratory well on the
massive Nizhnevartov dome in the middle Ob' region
' The Soviets measure oil reserves and production in tons. For
convenience-and in keeping with oil industry convention-this
report uses barrels, with 1 ton of oil, on the average, equaling 7.3
barrels
I Most Western estimates (including those derived from our engi-
neering analysis) tend to cluster around 15 billion barrels, a figure
of West Siberia. Seismic work had earlier delineated
this very promising hydrocarbon trap. Complex logis-
tic problems associated with the harsh climate and
geography of West Siberia, however, delayed comple-
tion of the first production well until 1969. The
developed field now covers some 1,000 to 1,500 square
kilometers-a little more than half the size of Rhode
Island (figure 3)~
25X1 1 Top
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
Samotlor has proved a far richer producer than the
Soviets anticipated. As development drilling pro-
gressed, estimates of the recoverable reserves for the
field grew, eventually converging on a figure of about
15 billion barrels. Estimates of projected maximum
yearly production-as reported in the Soviet open
press-also climbed from 2 million b/d in the early
1970s to 3 million b/d by late 1979
Soon after production operations commenced, the
Soviets began using water injection, a management
scheme designed to maintain reservoir pressure in
order to increase initial oil production from the field.
Although commonly used in the Soviet Union and
effective for rapidly fulfilling production quotas and
minimizing the early need for pumps, this practice
can damage a newly producing reservoir and reduce
ultimate recovery from the field. The Soviets com-
pounded the problem by using untreated water from
the three large lakes at the field rather than water
treated to make it compatible with the connate water
already in the reservoirs.' Western oil companies
usually apply the water-flooding technique as a sec-
ondary-rather than primary-recovery method after
a field has been in production for some time, and then
only with specially treated water
To boost production even further, the Soviets also
began an accelerated drilling program aimed at rapid-
ly completing wells to the five major oil-producing
horizons of the field.
by mid-1981 the Soviets had drilled
some 3,500 production wells and another 1,000 injec-
tion wells.
As development has
progressed, they have introduced both high-capacity
rod and submersible pumps, and have also initiated an
extensive gas lift program for the field
Recent Production History
Production at Samotlor rose rapidly durin the 1970s,
reaching about 2.2 million b/d by 197? By
1977 production stood at approximately ml ion
Improperly performed waterflooding-particularly as was the case
here-poses serious problems for a field like Samotlor, whose clays
swell on contact with the water and clog sections of the reservoirs.
(s)
This is the consensus of most reliable sources, but a sign at
Samotlor, photographed in 1981, showed this figure to be 101
million tons annually-or roughly 2 million b/d.
b/d and substantially exceeded the original Soviet 25X1
projections for the maximum capacity of the field. At
that time, various authoritative Soviet journals report-
ed that the field "had reached its production level." In
1978, however, production rose again to 2.86 million
b/d. The Soviets apparently believed that this, too,
was a maximum
Top Secret
25X1
25X1
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
Samotlor: Disguising the Production Decline
As production from Samotlor-as well as that from
one or two smaller satellite fields-is included in the
totals of these two associations, production for
Samotlor in 1981 and 1982 must have been lower in
both years. Indeed, based on our analysis of the
relative shares these two associations have contributed
to the production of Samotlor in the past, we conclude
that total output was between 3.04 and 3.08 million
b/d in 1981 and between 2.84 and 2.88 million b/d in
25X1 The decline may have taken Soviet planners by
25X1
25X1
expectation was probably reinforced by the anticipat-
ed completion of a French gas lift system that they
hoped would boost production from the nearly 1,300
gas-assisted wells by about 30 percent. A number of
Soviet press announcements stated in 1981 that the
field had just produced its billionth ton of oil, and
would yield its second billionth ton within six years-
implying that output would average at best 3.3 million
b/d over this period. Similarly, in March 1981 West-
ern visitors to Samotlor were told by its chief engineer
that production would presently level off at 3.1 million
b/d (presumably down somewhat from the 1980 peak)
and hold steady through 1985.
Coping With the Decline:
Gas Lift and Drilling
The Soviets apparently hope to slow the decline in
production through use of the gas lift system pur-
chased from France and continuation of a program of
mechanical pumping and drilling both of infill-or
The symbolic value of Samotlor to their oil industry
probably makes the Soviets reluctant to publicize the
ongoing decline at the field. With this in mind, we
believe the Soviets might be tempted to disguise the
magnitude of the decline at Samotlor by changing
their format for reporting its production to include
output from adjacent, satellite fields or by enlarging
the boundaries of the field beyond their original
of Samotlor, this would not only be convenient
statistically, but might also have a geologic justifica-
tion, albeit a tenuous one. The geology of the middle
Ob' region of West Siberia probably makes the main
oil-bearing horizons at Samotlor and the other fields
in its vicinity continuous, although not necessarily
productive throughout.a Under such circumstances, a
strict delineation of Samotlor or most other middle
Ob'fields is somewhat arbitrary and largely depen-
dent on the field operators' ability to locate precisel
Changes in reporting or field boundaries
would make the production situation at Samotlor
look healthier but would add nothing to the total oil
contribution that the production associations make to
national oil supplies
reduced space 5-wells and of new wells on the less
productive periphery of the field. The gas lift installa-
tion, an ambitious and expensive project involving
' This approach is commonly used in very mature oilfields and
involves drilling new wells between existing wells to tap pockets of
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
25X1
25X1
nearly 1,300 wells, has run into a series of problems
Most of the problems seem to be a result of
Soviet inexperience and unfamilarity with the equip-
ment and technology combined with alleged short-
comings in the automated control system for the
compressor stations. The Ministry of Petroleum In-
dustry has made repeated attempts to speed gas lift
conversion, including firing the production chief in
charge of administering the program and turning to
Japan for supplementary equipment
the gas lift
installation continues to proceed very slowly.
The delay in gas lift installation is probably only one
of many reasons for Samotlor's failure to reach the
production goals for 1981 and 1982. The Soviets
attempted to compensate for the gas lift failure with a
stepped-up drilling program and mechanical pumping
program, but evidently could not marshal the re-
sources to halt the field's decline. Our engineering
analysis now indicates that the Soviets must continue
a high rate of drilling and pump installation and get
the entire gas lift system installed and working prop-
erly if they are to have any chance at slowing
Samotlor's rate of decline. In the meantime, the
longer the system is delayed, the more other prob-
lems-like the rapidly rising field watercut, reservoir
damage, and perennial reliability problems with me-
chanical pumps-will combine to depress production
further.
Future Production Possibilities
Our engineering and geologic analysis indicates that
Samotlor's remaining recoverable oil should be from 5
to as high as 10 billion barrels-out of an original
total of roughly 15 to 20 billion barrels-depending
largely on what geologic boundaries are assumed for
the field. When these figures are mated with Soviet
data on the rock and fluid properties of the main
reservoirs, the production history of the field, and
alternative assumptions about the most likely pace of
future development-in the form of new well comple-
tions and additional artificial lift equipment-we can
estimate a range of possible values for the field
delivery schedule over the rest of this decade
Our estimate is bounded by two limiting cases that
assume a high and low value for geologic reserves and
well completions. Under the more favorable geologic
and development circumstances-the high case-the
best the Soviets could do would be to hold Samotlor's
production at a plateau near its current rate of output
through about 1985. By 1990, however, production
would have fallen by more than 40 percent since
1982-to about 1.7 million b/d. We believe this is a
very optimistic case and probably the less likely one,
particularly in view of the Soviets' inability to get the
gas lift system on track and substantially increase
drilling. Under the less favorable circumstances-the
low case-production would drop much more rapidly,
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
falling to about 1.6 million b/d by 1985 and perhaps
as low as 900,000 b/d by 1990. While this latter case
is pessimistic, it is probably closer to the actual
production course the field will follow
In any event, the performance of the field will hinge
on two unknowns: the amount of oil left in the field
and, even more important, the size and effectiveness
of the additional investment the Soviets are willing to
make in Samotlor. The outcome, therefore, probably
will lie somewhere between the Soviets' ambitious
goal of maintaining production at a relative plateau
between now and 1985 or 1986 and the results of our
more pessimistic modeling case. Our best estimate of
future production would suggest that, after several
years of reasonably shallow decline, production at
Samotlor will fall fairly rapidly-by some 10 to 15
percent annually-by the end of this decade. Accord-
ingly, output from Samotlor would probably stand
somewhere in the vicinity of 2 million b/d by 1985
and close to 1 million b/d by 1990.6
Based on our engineering analysis-and irrespective
of which of the reserves and investment scenarios is
projected for the field-we can draw a number of
reasonably firm conclusions about the future of
Samotlor:
? The original Samotlor deposit will continue to de-
cline. By 1990 the Soviets will need to find other
sources to replace the 1 million b/d-and, more
likely, 2 million b/d-of production that Samotlor
will have lost since 1982. In other words, the annual
loss the Soviets would have to make up by 1990
could easily equal the entire amount of Soviet oil
exports to Eastern Europe, or about two-thirds of
Mexico's current oil production. By the year 2000-
with a watercut approaching 95 percent-the useful
economic life of the field will be close to an end.
? At the very best-and assuming the gas lift and
drilling problems can be quickly corrected-Mos-
cow probably will be able to moderate the rate of
decline for no more than a few years more. By
pushing production to the limits of field capacity
Our Analytic Approach
The Soviets have not published detailed field produc-
tion data for some time, particularly for the major
oilfields like Samotlor. The little information they
have made available has usually been conflicting or
simply not credible. To make matters worse, the
Soviets treat data concerning their oil reserves as a
state secret; consequently, we do not know for certain
what they currently believe Samotlor's reserves to be.
To overcome this lack of information, we have devel-
oped methodologies that permit us to estimate cur-
rent production and reserves at major Soviet oilfields
and to project future yields under alternative devel-
opment scenarios. Our approach involves the applica-
tion of advanced techniques of geologic and reservoir
engineering analysis
The validity of these methodologies rests on
the act that the behavior of an oilfield and its
reservoirs is governed by a set of fundamental physi-
cal laws.
Over the past five years, we have performed reservoir
engineering simulations of Samotlor on a number of
occasions.a Despite the fact that there are probably
more technical data available on Samotlor than any
other Soviet oield, the sheer size and complexity of
the field, combined with the absence, until late 1982,
of a reliable series for recent production, introduced
considerable uncertainty into the analysis-and par-
ticularly into that done prior to 1982. The results
reported here summarize a consensus of judgments
from the earlier studies, updated by the findings of
the most recent simulations.
25X1
25X1
25X1
25X1
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
early on through an aggressive water injection
program, the Soviets have not only caused reservoir
damage but have also limited ultimate recovery and
substantially raised the effort-and cost-required
to prevent a steep decline. This, in fact, is what has
happened at most other large Soviet oilfields and
represents the price the Soviets have paid for em-
phasizing rapid, near-term growth in production
rather than balanced field development. With the
field peaking in 1980 and having produced possibly
50 percent or more of its reserves, it will be very
difficult to hold production at a relative plateau for
more than a few years beyond peak.'
? Continued high rates of drilling and new well
completions and successful completion of the gas lift
system will be essential to minimizing the rate of
decline and keeping production in the higher portion
of our forecasted range. By the end of the decade,
however, Samotlor's production probably will be
only fractionally higher with the gas lift than it
would have been without it. Put simply, over the
next seven years, the Soviets will be committed to a
large and accelerating investment in drilling and
fluid lift equipment just to keep production from
25X1
25X1
falling too low too fast.1
Outlook
The situation at Samotlor epitomizes the oil challenge
Moscow faces over the rest of this decade. With
production from Samotlor falling, every barrel of oil
less that the field produces is one more barrel the
Soviets must find and produce elsewhere if they are to
avert a downturn in national oil production this
' In theory, an oilfield can be held near its peak production level
until as much as 60 to 70 percent of its reserves has been depleted.
This assumes, of course, healthy reservoirs and full-scale drilling
and fluid lift programs. In practice, the limiting percentage is often
lower-as would probably be the case at Samotlor, where water
injection began almost simultaneously with production and improp-
er devel pmenLand fli Id operating practices have caused reservoir
damage
Gas lift is essentially a replacement for mechanical pumping
rather than a form of enhanced recovery that would increase the
ultimate yield of the field. Successful completion of the gas lift
system would initially raise daily production from Samotlor and
permit it to remain at a relative plateau for several years thereafter.
Subsequently, however, the decline would continue, but at a higher
Thus far, the Soviets have managed to
do this by developing a number of much smaller fields
Although these
smaller fields contain sufficient reserves to expand
production in West Siberia, the costs-in terms of
development time and of real resources like labor,
drill rigs, pumps, and support infrastructure-are
much higher relative to oil output than for an estab-
lished supergiant like Samotlor.
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
Although the ongoing decline at Samotlor by itself,
may not make or break the Soviet oil industry, it
graphically illustrates the dilemma in which the Sovi-
ets now find themselves. Because of the way in which
the field was developed, the industry is committed to
an accelerating and very expensive investment effort
to minimize the decline of Samotlor. In the absence of
the discovery and rapid development of a new Samot-
lor-an eventuality we judge possible but not likely on
the basis of our geologic analysis-the alternative is
an even larger investment in developing newer but
smaller fields. In either case, the costs are high and
increasing. The strength of the Soviet oil industry has
been its ability to make such an effort in the past. The
potential weakness is that, given the enormous size of
the continuing investment required, Moscow may no
longer be able to foot the entire bill and accomplish
other essential tasks in the economy.'
Top Secret 8
25X1
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
 Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1
Top Secret
Top Secret
Sanitized Copy Approved for Release 2009/12/29: CIA-RDP85T00283R000100020004-1