DI PUBLICATION FOR PASSAGE TO SENATOR BENSTEN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88G01116R001202280004-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 35
• Document Creation Date: December 22, 2016
• Document Release Date: March 3, 2011
• Sequence Number: 4
• Publication Date: May 19, 1986
• Content Type: LETTER

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cIr-
1079X/2
19 May 1986
NOTE TO: Executive Secretary l4,-
FROM: Executive Assistant/DDI
SUBJECT: DI Publication for Passage to
Senator Bentsen
REFERENCE: ER 1079x/1 dated 29 April 86
Letter to DDCI from Bentsen
Attached is the DI response to Bentsen's
letter of 29 April. Since the DDCI will be away
all week, we are sending it out under the DDI's
signature.
Attachment:
As stated
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Central Intelligence Agency
Office of the ;Debut 4lixec-tor-for -Intel ce
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;ECRET
Central In;clligence Avencv
19 MAY 1986
The Honorable Lloyd Bentsen
Select Committee on Intelligence
United States Senate
Washington, D. C. 20510
Enclosed is a copy of the classified version of the research
paper, "Soviet Needs for Western Petroleum Technology and
Equipment," that Bob Gates referred to in his letter of 14 April
1986. I hope you will find it informative. If I can be of any
further assistance, please let me know.
Richar err
Deputy Director-,3 or Intelligence
Unclassified when Secret
attachment is removed.
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Distribution:
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1 - OCA (w/o att)
1 - Ex Secretary (w/o att)
1 - Ex Registry (w/o att)
1 - DDI (w/o att)
w/o att)
0/DDJ 19MAY86)
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-EXECUTIVE SECRET ARIAT`-~'
ROE'TIN(, SLIP
INFO DATE INITIAL
Compt
DZSOVAI~
D/OGI
Remarks To 13: Pleas ~t64y., of unclassified
version is provided; recommend transmittal
over DDCI signature.
E utive Secretary
2 May 86
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'7EDYII'BENTSEN
TEXAS
fttiteb 'tateg senate
April 29, 1986
Mr. Robert M. Gates
Deputy Director of Central Intelligence
Central Intelligence Agency
Washington, D.C. 20505
..)M YrtiFEF
FINANCE
ENVIRONMENT AND PUBLIC WORKS
JOINT ECONOMIC
JOINT COMMITTEE ON TAXATION
SELECT COMMITTEE ON INTELLIGENCE
Executive Registry
86- 1079X/1
First, let me extend my congratulations on your confirmation
as DDCI. I am confident that you will live up to all the
confidence that has been shown in you by so many people. I
look forward to working successfully with you in your new
capacity as much as I did in your old one.
Second, I appreciate your work in having the study on the
"Role of Western Equipment in Soviet Oil and Gas Development"
sanitized and released in an unclassified version. As I
indicated in my letter to Bill Casey, it is always useful to
have available for the public debate as much relevant
information as possible. I am also looking forward to the
new study on this topic, which you indicated will be
published shortly.
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TRANSMITTAL SLIP
DATE
14Apr86
TO:
ER
ROOM NO.
BUILDING
REMARKS:
FROM:
DDI
ROOM NO.
BUILDING
EXTENSION
FORM NO. REPLACES FORM 36-8 (47)
1 FFR RR 7d 1 WYV`LJ IAAV oo III -
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Central Intelligence Agency
14 April 1986
The Honorable Malcolm Baldrige
Secretary of Commerce
Washington, D.C. 20230
At the request of one of the members of the Senate
Select Committee on Intelligence, we have sanitized and
issued on an unclassified basis the enclosed assessment
of "Soviet Needs for Western Petroleum Technology and
Equipment." I forward a copy to you for whatever further
use you and your colleagues at Commerce may wish to make
of it.
Regards,
illiam J. Casey
Director of Central Intelligence
Enclosure:
As Stated
DDI/RMGates/de
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Central Intelligence Agency
Office of the Deputy Director for Intelligence
DDI #01200-86
14 April 1986
NOTE TO: The Honorable Richard Perle
Assistant Secretary of Defense for
International Security Policy
At the request of one of the members of the
Senate Select Committee on Intelligence, we have
sanitized and forwarded an unclassified copy of
a 1984 study on the "Role of Western Equipment
in Soviet Oil and Gas Development." I attach an
unclassified copy should you wish to make use of
it in your ongoing efforts relating to technology
transfer.
Robert M. Gates
Deputy Director for Intelligence
Attachment:
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Central Intelligence Agency
DDI #01199-86
14 April 1986
The Honorable Lloyd Bentsen
Select Committee on Intelligence
United States Senate
Washington, D.C. 20510
In response to your letter to Bill Casey of March 11th, we
have sanitized our study on the "Role of Western Equipment in
Soviet Oil and Gas Development." An unclassified version of this
paper is enclosed for your use. We also are providing copies to
the Department of Defense, Commerce and the Senate Select
Committee on Intelligence for their use.
We will soon publish a classified major research paper on
this topic which should provide additional information, although
it would not be available for public use.
Sincerely,
Robert M. Gates
Deputy Director for Intelligence
Enclosure:
As Stated
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TO: Senator Lloyd Bentsen
Senate Select Committee on Intelligence
DDI #01199-86
DDI/RMGates/d
DISTRIBUTION: (w incoming and enclosure)
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Central Intelligence Agency
14 April 1986
The Honorable Dave Durenberger
Chairman
Select Committee on Intelligence
United States Senate
Washington, D.C. 20510
Dear Mr. Chairman:
Several weeks ago, Senator Bentsen asked us to look into
whether the information in the September 1984 study "Role of
Western Equipment in Soviet Oil and Gas Development" might not be
made public.
We have been able to sanitize this paper and an unclassified
version is enclosed for whatever use the Committee may wish to
make of it. We have provided unclassified copies to Senator
Bentsen and to the Departments of Commerce and Defense.
Sincerely,
Robert M. Gates
Deputy Director for Intelligence
Enclosure:
As Stated
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TO: Senator Dave Durenberger
Chairman, Senate Select Committee on Intelligence
DDI #01198-86
DDI/RMGates/de
DISTRIBUTION: (w/incoming and enclosure)
0 - Addressee
1 - D/OCA
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inittb etate!5 *tnatt
March 11, 1986
The Hon. William J. Casey
Director of Central Intelligence
The Central Intelligence Agency
Washington, D.C. 20505
Dear Bill:
6EL(CT COirM:TTEr oh JA-EL1 'ttiCF
Executive Fc-,Ii;try
86- 1079x
As we consider our national policy with regard to the sale of
oil field equipment to the Soviet Union, it is vital that all
available information be laid on the table for public
examination and consideration, except for information whose
release could cause damage to our national security. In this
regard, I want to address a CIA study entitled Role of
Western Equipment in Soviet Oil-and Gas Development (U),
completed and issued by your agency in September 1984. This
study is directly relevant as to the effects on the Soviet
Union of the U.S. embargo of oil field equipment, and-I
believe it deserves a wider audience than just those of us
who are presently privy to its information.
The study is classified at the SECRET level. Given the time
that has elapsed since the information on which it is based
was assembled, I wonder if much--if not all--of the
information in this study could not now be made public. I am
certainly not asking for the release or declassification of
material that would have any adverse effect on our national
security. I believe, though, that the level of debate on
this important issue would be raised by having added to it
the benefits of the CIA's work in this area. Can this study,
or as much of it as possible, be released to the public at an
early date?
Lloyd Bentsen
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Soviet Needs for Western Petroleum Technology and Equipment
Summary
The exploration and development of new oil and gas deposits in the USSR
during the 1986-2000 period will pose increasingly complex technical
challenges. Because Soviet industry will remain unable to supply the
technology and high-quality equipment required for critical applications, the
importance of Western equipment to the Soviet effort will increase markedly.
In particular, deeper drilling in offshore and onshore exploration and
development, as well as the exploitation of corrosive ("sour") oil and gas
deposits, will require significant inputs of Western technology and
equipment.
This memorandum analyzes the availability of Western technology and the
supplementary measures adopted by the Politburo to ensure the reequipping of
the Soviet oil and gas industries with improved equipment in the 1986-2000
period. Major equipment improvements are urgently needed to work oil and gas
deposits under increasingly hostile operating environments onshore and
offshore. Faster exploration and development of new oil reserves also is
critical if Moscow is to avoid a sharper downturn in oil production, which
provides 40 percent of domestic primary energy supply and 50 percent of the
USSR's foreign earnings.
Soviet Energy Production
Since 1960, output of primary energy--crude oil, natural gas, coal,
hydroelectric power, nuclear power, and minor fuels--has tripled. Growth has
been uneven among the major fuels, however. Coal was the main fuel for the
national economy before the mid-1960s but by 1985 its share of primary energy
production was only 21 percent. Meanwhile, oil output soared from 3 million
barrels per day (b/d) in 1960 to a peak 12.3 million b/d in 1983, before
declining to 11.9 million (b/d) in 1985, an amount equal to 37 percent of
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primary energy production. Natural gas output has grown even more rapidly--
from 45 billion cubic meters (m ) in 1960 to 643 billion m , or 33 percent of
primary energy, in 1985.
With expanding energy production has come an ever increasing share of
industrial investment--up from 28 percent in 1975 to 35 percent in 1984. The
continuing emphasis on oil production has resulted in the allocation of nearly
half of energy investment to the oil industry since 1981. This emphasis has
cut into the resources available for the coal and electric power industries,
thereby contributing to the stagnation of coal production and the marginal
inadequacy of electric power supply. The burdensome nature of oil production
is illustrated by the relationship of changes in investment and output between
1975 and 1984. Oil investment rose by some 135 percent while oil output
increased 25 percent. The gas industry, in contrast, presented a remarkable
success story: investment rose about 75 percent while output doubled.
Soviet energy production is affected by the quantity and quality of
exploitable resources, the quality and availability of equipment and
technology, and the supply and utilization of skilled management and labor.
Because of oil's preeminence as an export commodity and source of foreign
currency, the most urgent problems center on oil production. Although Western
experts have estimated Soviet oil reserves at roughly 50-70 billion barrels,
Moscow's effort to sustain oil output at a high level is encountering serious
difficulties and increasing costs that reflect such factors as past emphasis
on production at the expense of exploration, the effects of years of excessive
production rates at giant fields, increasing amount of water in output of
older wells, severe operating conditions in subarctic West Siberia, and
endemic problems with the supply and quality of domestic equipment.
The age and size distribution of developed reserves in West Siberia also
contributes to Moscow's difficulties in maintaining oil output. The new
fields tapped there since 1979 have been smaller by an order of magnitude and
have lower flow rates than those brought on line in the previous decade.
Moreover, the older, larger fields are already declining in production.
Attempts to sustain output by drilling a large number of wells in the smaller,
less productive fields lead to a steep rise in investment.
The USSR's reserves of natural gas--estimated at some 34 trillion m3--
comprise about 40 percent of the world's proven reserves and are relatively
accessible, in the Soviets' view, for rapid development. However, the arctic
conditions under which the clean and relatively shallow Tyumen' gas deposits
must be worked are difficult, and the extraction and processing of the toxic
and corrosive sour gas from the deep deposits of the Pre-Caspian Depression
entail severe dangers and technical problems. Limitations also hold regarding
much of the long-term substitution of other fuels for oil, especially coal.
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In particular, Soviet coal production--intended to be a leading substitute for
oil in the domestic economy after 2000--has been held back by the depletion of
the better quality reserves in the western USSR, the low energy content and
remoteness of coal supplies from Kazakhstan and East Siberia, and investment
policies that for many years have favored oil.
Soviet Energy Plans and Challenges--1986-2000
The USSR's Long-Term Energy Program proposes major changes in the
national energy balance. Natural gas is to provide nearly all of the
increment in total primary energy production into the mid-1990s while coal,
after intensive investment in production, processing, and consuming
facilities, is to become the dominant fuel in the USSR after 2000. Nuclear
power is to provide substantial additional energy in the 1990s and beyond.
During the 1986-2000 period, the Soviets expect the share of natural gas
in the primary energy balance to expand rapidly; it could exceed 40 percent
after 1990, while oil's share could shrink to about 30 percent. Natural gas
has already replaced oil as the chief incremental source of energy, and we
believe that the Soviets can continue to boost gas output largely by using
existing domestic equipment and technology. Oil's share in the primary energy
balance will decline as a result of gas-for-oil substitution and likely
further slippage in oil production.
The USSR has achieved its present status as the world's leading producer
of oil and natural gas largely through the application of domestically
manufactured equipment. When needed, Moscow has turned to the West for
selected technology and high-quality, state-of-the-art equipment to obtain
higher operating performance and more reliable service, as well as to overcome
shortages of key items and to supply projects for which Soviet equipment is
inadequate (for example, sour-gas development). Last year, the Soviets
undertook a program to enhance both the quality and quantity of equipment
manufactured domestically. Thus far, however, the inefficiencies of the
Soviet economic system have hindered both the production of high-quality oil
and gas equipment and the assimilation of advanced techniques and equipment
acquired from the West.
For some time Moscow has been sending mixed signals concerning its
intentions with respect to importing Western petroleum technology and
equipment. Press articles have stressed the need for better technology and
high-quality equipment comparable to those obtainable from the West, but
leadership statements have been ambivalent or have leaned toward a domestic
solution. Soviet trade and industry officials have held talks with many
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Western suppliers to elicit technical data and proposals for supply of a wide
range of advanced technology and equipment, but the large imports in recent
years comprised mainly pipe and equipment for gas-pipeline construction and
development of sour oil and gas deposits.
Some events suggest that Soviet decisions not to follow through and order
a larger amount of Western equipment reflect in part conflicting views within
the Soviet bureaucracy about technical alternatives and the choice of
supplier--domestic or foreign. In 1983, for example, the Soviets negotiated
for the purchase of some $40 million of US high-capacity electric submersible
pumps, and an export license was approved in January 1984--but the purchase
was not completed. Changes in the operating condition of the wells for which
these pumps had been planned may have played a part in the decision not to
purchase but, on the basis of indirect and fragmentary evidence, we believe
the decision not to purchase was probably influenced by other factors--ongoing
bureaucratic squabbles over the relative merits of gas-lift systems and high-
capacity electric submersible pumps, the allocation of hard currency, and
perhaps dependency on the West.
General Secretary Gorbachev's early September 1985 speech to oil workers
and party cadres in Tyumen' leaves unclear Soviet purchase intentions. His
remarks neither addressed the role of Western equipment nor clearly delineated
how Soviet industry can be made to achieve timely delivery of the improved
equipment he recognizes as needed for the increasingly difficult production
conditions (especially for oil) in West Siberia.
The tenor of Gorbachev's remarks suggests that the Soviets will seek to
improve the general supply of equipment to the oil and gas fields mainly by
improving the efficiency and technical level of domestic industry. To this
end, some near-term gains in the supply of domestic equipment may result from
Gorbachev's campaign to improve worker morale and productivity, and planning
and organizational changes may ultimately lead to better planning, better
product supply and quality, and prompt deliveries. However, accomplishing
such a revolution within the bounds of the Soviet economic system--indeed,
even laying the necessary organizational foundations--would require not only
many years but also, according to some Western observers, a greater
modification of the USSR's economic fabric than would in the end be acceptable
to the regime.
A purely domestic solution to the equipment problem is, however, unlikely
to be sufficient to offset the rapidly advancing depletion of existing oil
deposits. A decision by Moscow to solve its oil production problems by a much
greater reliance on Western technology and equipment would require large
imports of rotary drilling rigs, oil country tubular goods, and pumping
equipment.
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Major Requirements for Oil and Gas Technology and Equipment
At present most of the petroleum technology and equipment used in the
USSR is obtained domestically or with some help from the East European CEMA
countries. The quality and technical characteristics of East European output
of nearly all of the items needed for critical applications rate only low to
adequate when compared to Western standards. Changing operating conditions--
deeper drilling onshore and offshore, higher pressures and temperatures,
corrosive producing environments, and increasing percentages of associated
water production--have rendered most of those items obsolete for an increasing
share of operations.
Several key oil and gas projects scheduled for 1986-90 will require
Western inputs if development is to proceed on schedule. The first phase of
development at Astrakhan' and Karachaganak started during 1981-85 was based
heavily on equipment ordered from French and West German firms; we expect that
Moscow will place additional orders with Western firms for the second phase of
development during 1986-90. All the major onshore projects in the Pre-Caspian
Depression--Astrakhan', Karachaganak, Tengiz, and Zhanazhol--involve
development of deep, sour oil and gas deposits. Because of similar geologic
conditions, the technology and main high-pressure-and-temperature, corrosion-
resistant equipment packages needed for these projects will be almost
identical. Only the depths, pressures, temperatures, and ratios of oil, gas,
sulfur, and carbon dioxide are apt to vary. Continued exploration and
development of West Siberian onshore oil and gas deposits will require
generally similar equipment for deep high-pressure-and-temperature service,
but without the special features for coping with high concentrations of
hydrogen sulfide (H2S) and carbon dioxide (CO 2)'
The need to improve exploration efforts for deeper, harder-to-find
petroleum deposits prompted the Politburo in April 1985 to authorize the
reequipping of Ministry of Geology field parties with improved seismic and
deep-well surveying and drilling equipment. This authorization might result
in new orders for Western equipment and plants to produce some of the
equipment in the USSR. The Soviets have expressed keen interest in
modularized, compact deep-drilling rigs modified for air transport and arctic
service, as well as in heavy-duty land rigs for deep drilling at Karachaganak,
Astrakhan', Tengiz, and Zhanazhol.
Among the major Soviet offshore projects scheduled for the 1986-90
period, the most difficult will be geophysical surveying and drilling
operations in the Barents Sea, Kara Sea, and offshore Sakhalin. Efficient
conduct of these operations will call for Western technology, equipment, and
training. Western offshore equipment that will be needed includes:
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? Geophysical surveying boats capable of conducting simultaneous
computerized seismic, magnetic, gravimetric, and hydrocarbon seafloor
sampling surveys with online mapping capability.
? Offshore drilling rigs for platform, semi-submersible, and drillship
applications--such as dynamic positioning, anchoring, and reentry
systems; telescopic riser and seafloor connection systems; seafloor
wellheads and blowout preventer stacks with remote hydraulic controls;
mud-logging laboratories; geophysical well-logging equipment; and
drilling monitoring equipment that has online capability.
? Ice-resistant structural and/or hull design may be required for the
survey vessels and drillships for service in the arctic seas.
? Offshore production platforms and seafloor production systems (ice-
resistant for many areas), such as templates, production manifolds,
wellheads and Christmas trees, flow lines, gathering lines, and
pipelines.
There is no reason to believe that the Soviets can modernize plants and
produce all the new equipment that they will need in the years immediately
ahead. In the USSR, the introduction of new technology, or even minor
modification of an existing product, is usually a time-consuming process
involving research institutes, design bureaus, ministries, and, finally, the
manufacturing enterprise. Changes in production schedules, improvements in
metallurgy, and introduction of new methods of metalworking for new or
improved equipment production at existing Soviet and East European plants
usually proceed at glacial speed. Gorbachev's moves to streamline the
ministerial system and better coordinate the complex activities of research
institutes, design bureaus, and production units are likely to have only
slight impact on these conditions for at least several years. However, if
some of the new production is assigned to the defense industries, lead times
for production of many new or improved items probably could be reduced
materially.
Needs for Specific Categories of Technology and Equipment
While the future course of Soviet reliance on the West to redress current
production problems and face new challenges in exploration and development is
yet to be determined, we expect the Soviets will continue to purchase from the
West the more sophisticated and highly specialized equipment for critical
operations. As exploitation and development moves increasingly to deeper
onshore and offshore fields, the demand for these purchases is likely to
rise. Specifically, indigenous technology and equipment will become
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increasingly inefficient and uneconomic relative to the more demanding
technical requirements of the late 1980s--particularly in deep drilling and
producing. Moreover, skilled manpower and technical services to cope with
those requirements will remain in short supply. Unless Moscow turns to the
West for more equipment and technical services, the decline in oil production
may accelerate.
Soviet needs for high-quality technology and equipment currently
available only from non-Communist suppliers are identified in table 1 by
specific projects and major development regions. Table 2 summarizes the
availability of oil and gas equipment by major areas of origin--CEMA,
developed West (COCOM), and Third World. Indigenous Soviet and East European
capabilities are generally low with respect to most of the technology and
equipment needed. The following paragraphs summarize, by category of need,
those indigenous capabilities and Western availability.
Oil and Gas Exploration. Soviet exploration technology and equipment are
rated low by Western standards. Although technically competent, Soviet
petroleum geologists use poor equipment, which limits accuracy and hinders
their progress. Hungary and Romania produce some equipment that has slightly
better capabilities, but they have only limited capacity for production.
Moreover, the Soviet Union lags behind the West in state-of-the-art computer
technology--an essential component of any advanced exploration system. Rapid
improvement in the Soviet' capabilities to supply needed exploration equipment
is unlikely.
State-of-the-art exploration technology is available in the United
States, France, and the United Kingdom; the remaining developed Western
countries have high-level technology. Austria and several Latin American
countries have adequate technology. The United States has state-of-the-art
capability for producing most types of exploration equipment, and Canada,
France, and the United Kingdom have high capability. Other countries have
production capabilities and capacities that are adequate or less than adequate
for most of the surveys now being conducted, but they probably would not be
adequate for much of the work that needs to be accomplished in new areas.
Latin American and non-developed Asian suppliers lack a demonstrated ability
to produce advanced exploration equipment.
Oil and Gas Drilling and Production. Soviet drilling and production
technology, and the capability to produce equipment, is low. Romania and
Hungary have slightly better capabilities, but neither can produce in
sufficient volume to meet Soviet needs. None of the CEMA countries has more
than a low capability for offshore operations or for deep sour oil and gas
development under operating conditions that require resistance to high
pressures and high temperatures. By the mid-1990s, the Soviets may be able to
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improve their capability somewhat, but they are unlikely in the near term to
attain substantial improvements in either the design or supply of equipment.
The lack of special alloys, indifferent quality control, and unresponsiveness
of equipment producers to the changing technical needs of operators are likely
to continue.
State-of-the-art drilling and production technology is available in the
United States; most other developed countries--as well as Austria, Brazil,
Mexico, Venezuela, and Singapore--can provide high-level technology. Norway
has recently advanced its offshore drilling capability through the development
of dynamic positioning systems and remote-control systems for operation of
subsea blowout preventer stacks and other wellhead equipment. Mexico has
acquired considerable experience in the production of deep sour oil, gas, and
condensate onshore and offshore. Brazil is a leader in the emerging
technology for seafloor completion of oil and gas wells and related seafloor
production systems. Argentina, India, Peru, and Taiwan can provide adequate
technology.
The United States can produce in large volume the state-of-the-art high
pressure-temperature, corrosion-resistant drilling and producing equipment
required for severe service (high pressure and temperature, corrosive
environment). Several other developed countries have high capability to
produce some items in limited quantities. Elsewhere in the West, the
capability and capacity to produce these items is quite low.
Pipeline-Construction Technology, Materials, and Equipment. Soviet
Arctic pipeline construction technology is adequate for most current oil and
gas needs and superior to that available in Eastern Europe. Soviet materials
and equipment are adequate to meet the requirements for most oil pipelines.
The Soviets have not demonstrated a capability to produce significant
quantities of large-diameter pipe suitable for high-pressure gas pipeline
service, however. Eastern Europe has almost no capability to produce pipe
over 820 mm in diameter.
Moscow, acutely aware of the problem of low-quality domestic linepipe, is
attempting to upgrade existing pipe-mill capacity. Limited production
capability has been achieved using a spiral-weld, multilayer manufacturing
process and an alternative dual longitudinal welding process, which joins two
"U" shaped sheets of steel plate to form the pipe. Although these processes
are cumbersome and archaic by Western industry standards, they do provide a
usable product. The unproven multiwall Soviet pipe will not, however, be easy
to work with; it is heavier, shorter in length, and it will require 3 or 4
times as much welding in the field as conventional Western linepipe. Linepipe
imported from the West accounts for nearly all of the 23,000 kilometers of
1,420-mm-diameter gas pipeline laid in the USSR during 1981-85. Japan, West
Germany, and Italy were the principal suppliers.
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The USSR is apt to depend even less on the West for gas turbines during
1986-90, largely because of increased domestic turbine production, a leveling
off in the pace of Soviet construction of large-diameter gas pipelines, and
availability of other power sources. The Soviets initiated a crash program
during 1982 and 1983 to produce 16-megawatt (MW) and 25-MW industrial
turbines. From the reported progress of the gas pipeline system, it appears
that Soviet production of large industrial gas turbines has increased
sufficiently to meet nearly all needs of the 1986-90 pipeline construction
program. The Soviet media report success in the program to build 16-MW
aeroderivative turbines from gas generators of retired engines from TU-154
aircraft. They also indicate that a number of domestically manufactured 25-MW
turbines have been installed in pipeline compressor stations. West of the
Urals, moreover, several compressor stations are being equipped with Soviet
12.5-MW electric motors.
The USSR also has relied heavily on the West for pipelayers, and Ministry
of Gas officials have indicated the USSR will probably continue large imports
of pipelayers, bulldozers, and tractors for gas pipeline construction during
1986-90. Although the Soviets reportedly have had some success in producing a
prototype capable of handling 1,420-mm-diameter pipe, the pipelayer may not be
suitable for use under arctic conditions nor is it being mass produced. Poor
metallurgy and excessive tolerances of critical engine parts, together with a
shortage of proper low-temperature lubricants, result in rapid engine wear and
unreliable operation in extremely cold conditions. Short engine life and high
maintenance requirements considerably exacerbate the problems of pipeline
construction and operation in the arctic. To enhance pipeline system
efficiency, the USSR has also purchased several pipeline control systems, as
well as large quantities of pipeline valves and pipeline coating and wrapping
materials.
In terms of Western availabilities, state-of-the-art pipeline technology
is available from the United States and Canada; high-level technology is
available from other developed Western countries. Adequate technology is
widely available outside developed from Austria, Argentina, Brazil, Mexico,
Venezuela, India, and Singapore. State-of-the-art and high-level pipeline
equipment and linepipe are generally available from the larger industrialized
countries, and Sweden and Switzerland produce gas turbines for pipeline and
industrial service.
Specialized state-of-the-art pipeline materials and equipment for arctic
and offshore installation are available from the United States and, for most
items, from Canada. Although several Latin American oil-producing countries,
India, and Singapore have some technical capability, they produce little if
any of the materials and equipment. West Germany, Italy, Japan, and France
have exported most of the large-diameter linepipe (Sweden also has sold some),
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turbine-compressors, valves, and pipeline control systems purchased by the
USSR. Finally, both the United States and Japan have supplied pipelayers, but
Japan has filled nearly all orders since 1979.
Oil-Refining and Gas-Processing Technology and Equipment. The USSR
generally has been self-sufficient in most of the primary and secondary
processing equipment installed in its oil refineries. Soviet industry,
however, has had serious difficulty in producing hydrocracking equipment (for
the processing of heavy feedstocks into lighter hydrocarbon fuels) and
hydrogen-fluoride alkylation equipment (for the production of high-octane
gasoline). Access to Western hydrocracking technology would allow the USSR to
process larger amounts of heavy fuel oil into more valuable light products
such as gasoline, kerosene, and diesel fuel.
On average, Soviet technology and equipment for gas processing are rated
low in relation to future needs. The USSR has constructed plants that can
process relatively clean gas--specifically, that from the northern Tyumen'
deposits, but even there the Soviets have had to use imported equipment for
refrigeration and other special needs. They have not had similar success with
domestic technology in developing the sour gas deposits of Orenburg, the Pre-
Caspian Depression, and Central Asia. Their attempts in the late 1960s to
develop the Central Asian sour gas fields with domestic equipment experienced
major setbacks from accidents involving H?pS. In 1976 the Soviets finally
turned to the West for sulfur-removal technology and for equipment that would
enable them to produce and process sour gas on a commercial basis at the
Orenburg gas complex.
In the West, state-of-the-art oil refining technology is available from
all of the larger developed countries; high-level technology is available from
Austria and Singapore, and an adequate level is offered by some Latin American
and Asian countries. The larger Western countries also offer state-of-the-art,
refinery equipment, although not all countries produce all types of
equipment. Firms in Japan, France, West Germany, the United Kingdom, and
Canada, for example, can provide the technology and equipment for the
hydrocracking process and Canada and Western Europe have some capability to
manufacture equipment and to install the hydrogen fluoride-alkylation
process. Singapore has high overall capability for production of refinery
equipment, but the capability of most of the other Asian and Latin American
sources is low, except for Mexico and Venezuela, which have high capability to
produce fluid catalytic crackers.
The United States has state-of-the-art gas-processing plants. West
Germany, France, the Netherlands, and Italy can supply comparable high-level
equipment; Mexico and Venezuela, adequate equipment. The Soviets have
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purchased technology and equipment for the major sour oil and gas development
projects in the Pre-Caspian Depression mainly from French and West German
firms.
Synthetic Fuel From Coal. Soviet long-range planning for the coal
industry is based on a major expansion of open-pit operations. Much of the
coal to be mined is poor in heat content, and some cannot be shipped for long
distances because its high moisture content results in spontaneous
combustion. Consequently, new solutions are needed to facilitate the long-
distance transportation of energy from coal, including possibly the
development of a synfuels industry. The Soviets hope to be largely self-
sufficient in surface-mining equipment; but, until the heavy equipment plant
at Krasnoyarsk goes into full production in the late 1980s, Moscow will
continue to purchase from East Germany and from Western suppliers.
In recognition of the difficulty of supplying increasing amounts of
liquid fuels at a time when oil production is faltering, the Soviet Long-Term
Energy Program included reference to development of synfuels production from
coal. Moscow has targeted "commercial-scale" production for the mid-1990s; we
believe that this goal means several million tons of liquid fuel from coal
annually.
Soviet synfuels research program has focused on development of two
technologies that yield synthetic liquid fuels: pyrolysis and direct coal-
conversion. The Soviets probably will not need substantial Western technical
assistance to construct commercial-scale pyrolysis facilities; a demonstration
plant was completed in 1983. However, the Soviet effort to improve the
Bergius direct-conversion process--a technology obtained from Germany at the
end of World War II--has met with only limited success. An official of a West
Siberian scientific institute reported in 1983 that Soviet experimental work
on direct conversion was insufficient to support a major synfuels project. If
the USSR decides to build a commercial-scale direct-conversion facility during
the 1990s, we believe that substantial Western technology and equipment would
be required.
Most of the proven direct-conversion technology for pilot-plants with
operating capacities greater than 5 tons a day (coal) originated in the United
States. The West German firms Ruhrkohle and Veba operate in West Germany the
only significant direct-conversion plants located outside the United States.
Ruhrkohle also has a financial interest in the so-called EDS and H-Coal
processes developed in the United States and has rights to the technology.
The USSR is unlikely to purchase equipment for a synfuels industry in the near
term because it does not plan to build commercial-scale liquefaction
facilities until after 1990.
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Table i
Soviet Needs for Western Oil and Gas
Equipment and Technology for Key Projects,
1985-2000
Ezpkwatkon
Technology (all phases)
Project feasibility and management studies
Offshore
Onshore
Barents
Sakhalin
Caspian
Astrakhan'
Tengiz
Karachaganak
Zhanazhol
N. Tyumen'
Sea
Sea
Gas/
Oil/Gas
Gas/ ?
Oil/Gas
Oil/Gas
Condensate
Condensate
Technical integration of hardware and software ?
Geophysical equipment (all types)
excluding hull and boat)
Satellite navigation equipment ? ? ?
Acoustic/ ultrasonic sensors and geophysical
equipment:
Geophones for onshore and offshore
seismic surveying
Land gravimeters
Magneto-telluric systems
Well-logging equipment
Mud-logging equipment
Monitoring equipment for drilling
operations (mud systems and drill-stem
testing equipment)
Computer hardware
Drilling aad Produclion
Technology (all phases) ? ? ?
Project feasibility and mana.............a:_. ? . .
Technical integration of hardware and software ?
Corrosion-resistant producing equipment
(all types)?
Christmas trees and blowout preventers ? ?
Remote control systems - ? - ? -
Wellheads ? ?
Fhxitnotes appear at end of the table.
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Table I
Soviet Needs for Western Oil and Gas
Equipment and Technology for Key Projects,
1985-2000 (continued)
Offshore
Barents
Special steel tubes---casing, tubing, drill ?
collars, drill pipe
Packers, seals, valves
Pump rods
Deep submersible pumps (below 600-meter ?
depths)
-Manifold systems
Chemical inhibitors
High-pressure/temperature production
equipment (all types)
Christmas trees and blowout preventers
-Remote control systems
Wellhead
Casing and tubing
Packers, seals, valves ?
Deep submersible pumps (below 600-meter ?
depths)
Deep-well drilling rigs and tools (below 3,000- ?
d
Meter
epths onshore and offshore)
Offshore rd ling platforms
Riser and motion compensation systems
Dynamic positioning systems
Measuring instruments and control systems*
Pipeline Coastractioa
Technology (all phases)
Technical integration of hardware and software ?
Materials and equipment (all types)
Large-diameter Pipe (1,020- to 1,420-mm.
diameter pipe)
Footnotes appear at end of the table.
Project feasibility and management studies
Onshore
Sakhalin Caspian Astrakhan' Tcngiz
Sea Gas/ Oil/Gas
Condensate
S
Karachaganak Zhanazhol N. Tyumen'
G
as/
Condensate
Oil/Gas Oil/Gas
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Table 1
Soviet Needs for Western Oil and Cas
Equipment and Technology for Key Projects,
1985-2000 (continued)
Pipe wrapping and coating materials
-bore)
Pipeline control systems
Offshore Onshore
turbines)
Ilcavy duly pipelayers lover 50-ton load
capacity)
Gas ProcesslnI sad Oil Refining
Technology (all phases)
Project feasibility and management studies
Technical integration of hardware and software ?
Equipment
-Fluid catalytic cracking (FCC)
Ilydrocracking
Reduced crude cracking (alternative to FCC)
Ilydroprocessing
-Delayed coking and fluid coking
Catalytic reforming
Hydrogen fluoride alkylation
I quiprnent for production of additives for lubes
Gas processing plants ?
? Corrosion-resistant equipment is essential for operations in the
sotr oil and gas deposits of the Pre-Caspian Depression; elsewhere,
it would greatly reduce the need for frequent replacement of
downhole tubing and wellhead equipment.
Sakhalin Caspian Astrakhan' Tengiz Karacha snak Zhanazhol N. Tyumen'
Sea Gas/ Oil/Gas Gas/ Oil/Gas Oil/Gas
Condensate Condensate
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T
bl
Z
a
e
Quality and Availability of Oil and Gas
Equipment, by Major Area of Origin a
CEMA
USA
COCOM
Non-COCOM
Third World
Exploration
Technology (all phases)
Lo
Lo
X
Hi-X
O-A
0-A
Project feasibilit
and
di
y
management stu
es
Lo
Lo
X
Hi-X
O-A
0-A
Technical integration of hardware and software
Lo
Lo
X
Hi-X
O-Lo
Lo-A
Geophysical e
ui
ment (all t
q
p
ypes)
Lo
Lo
X
A-Hi
Lo
0-1
0
Seismic surve
vessels (
i
k
_
y
equ
pment pac
age excluding
hull and boat)
Lo
Lo
X
A-Hi
Lo
0-Lo
Satellite navi
ation e
ui
t
g
q
pmen
Lo
Lo
X
Hi
Lo-Hi
O-Lo
Acoustic/ultrasonic s
d
h
ensors an
geop
ysical
equipment:
Geophones for onshore
d
ff
h
i
an
o
s
ore se
smic
surveying
X
0-Hi
0
0-L.o
Land
ravimet
g
ers
Lo
X
0-Hi
0-Hi
Magneto-telluri
c systems
Well-logging equipment
Lo
Lo
X
O-Hi
O
Mud-loggin
e
ui
m
t
g
q
p
en
Lo
Lo
X
0-Hi
0
O-Lo
Monitoring equipment for drilling operations
(mud systems and drill-stem testing equipment)
Lo
Lo
X
0-Hi
0
0-1_0
Computer hardware
Lo
Lo
X
A-Hi
0
0.10
Drilling pr on
Technology (all phases)
Lo
Lo
X
Hi
0-Hi
A-Hi
Project feasibility and management studies
Lo
Lo
X
Hi
0-Hi
A-Hi
Technical integration of hardware and software
Lo
Lo
X
Hi
O-Hi
A-Hi
Equipment (all types)
Lo-A
Lo-A
X
Lo-Hi
O-A
Corrosion-re
i
t
t
i
d
O-A
s
s
an
uc
pro
ng equipment (all types)
Lo
Lo
X
Lo-tli
Lo-A
O-Lo
Lo
X
A-X
O-A
0-Lo
Remote control s
stems
_--
-
y
0
Io
X
0 X
0A
O co
Wellheads
Special steel tubes-casing, tubing, drill
collars, drill pipe
Footnmes appear at end of the table.
Lo
Lo
Lo
Lo
X
X
A-Hi
O-Hi
O Hi
0-l1i
-0-Lo
0-Hi
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E1Ei