5
/"l^ Dissemination Authorized
"
Office of Current Intelligence
THE PETROLEUM INDUSTRY DM ECONOMIC REGION V
OF THE USSR
pA HISTORICAL REVIEW PROGRAM RELEASE AS9
Office ot Research and Rcpyrru CENTRAL INTELLIGENCE AGENCY
FOREWORD
This reportondensationetailed analysis of Che production, refining, distribution, and consumption of crudo oil. natural gas. and petroleum products in Economicf the USSR.
Although the report contains only thc data and information essentiallear concept of Ihe economic importance of the petroleum industry innd in the USSR, the full results of the detailed study are available (see Mrthodology.
This report is oneeries of regional analyses of the Soviet petroleum industry in the postwar period.
GONTE NTS
'.'age
I. . .
II.
Crude .
Natural
Production Problems and Techniques 1
Prospecting
I. Crude
, 2. Prospecting Localities
HI.
IV.
Baku
V.
SSR
SSR .
SSR
TOPSECRE'I
VI. Supply
VII. Capabilities. Vulnerabilities, and
Appe ndixra
Appendix A. Production Trusts in Region
Appendix B. Petroleum Refineries in Region
Appendix C. Mitthodology
Appendix D. Gaps in
Appendix E. Source
Tables
Production of Crude Oil in Azerhaydzhan
SSR.
Production of Crude Oil from the Offshore
Oilfields of Azerbayd/.han SSR.
Production of Crude Oil in the Georgian
TOP-
-top-:
ClA/RR/SC
THE PETROLEUM INDUSTRY IN ECONOMIC REGION V
OF THE USSR*
Summary-
Economic Region V. Transcaucasus. _it the-most important single area in thc USSR for thc production of crude oil and petroleum products.roduction of crude oil inas aboutercent of total production in the USSR. Withinhe Baku fields in Azerbaydzhan SSR are the major producers. Of thcf crude oil inillion metriche Baku fields produced aboutillion tons. Of the remainder, lhe Georgian SSR produced00 tons.
The most important postwar development in (he petroleum industry ins thc large increase in the production of the offshore fields in the Baku area. Offshore production4ated atillion ions of crude oil and naturalarked increase over theroduction ofillion The trendlear indication that the future of the Baku area in the production of crude oil depends largely on the offshore operations.
The production of natural gas ins limited almost entirelyn SSR, and because of the practice of permitting natural gas lo be wasltd in the field, production thus (ar has not been significant
* The estimates and conclusions contained in this report represent the bcfil judgment of ORR as
Throughout this report, tonnages are given in metric Tins figure probably does not include natural gas.
4 tin refineries ofroducedim.ion Ions of products, an increase of approximatelyercenthe Baku refineries, in addition to producing more thanercent Of the Soviet requirement for lubricating oil, are the principal sources of jet fuel in the USSR andull range of petroleum productsfrom high-octane aviation gasoline) to bitumen. The total installed capacity of all refineries inncludesons of primary distillation capacity andillion tons of thermal And catalytic cracking capacity.
Consumption of petroleum products in Economics small in comparison with the availability of petroleum products. Consumption withinncreased from aboutillion tons8 toillion tonsnd the total availability of products produced withinncreased fromons8 toillion tons
The large surplus of potroleum products* ins distributed by rail and by water from the two refining centers at Baku and Batumi lo other areas of the USSR and to the other countries of the Sino-Soviet Bloc. 4 thc additional shipment ofons ofproducts from Batumi to countries outside thc Sino-Soviet Blocignificant development in the distribution of the surplus available in Region V. ajor portion of these shipments probably originated in Baku.
One pipeline connects Baku and Batumi and is used to transport charge stock to the Batumi refineries. Construction ofinch line.which probably will transport petroleum products from Baku to Batumi, is planned. This pipeline will increase the capabilities ofo distribute its surplus petroleum products.
ad an exportable surplus of crude oil of be-tweenillionillion tons. Virtually all of the surplus of crude oil is believed to have been distributed to the refineries at Groznyy and Gury'ev.
- 2
lffFT
The production ol crude oil and petroleum products in Economics not expected to increase significantly over4 level The large surplus of petroleum products ins an important factor in the petroleum economy of the USSR. Although consumption within the region may continue to increase somewhat.ay lie expected to maintain for manyery important positionurpluB petroleum area.
I. Introduction.
Economicf the USSR, commonly known as theincludes Azerbaydzhan SSR, thc Georgian SSR. and the Armenian SSR. Petroleum is the most important single industrial asset in the Transcaucasus. Thc industry r. centered in Baku, the capital of Azerbaydzhan, which ia located on U'ich Bay on the south side of the Apsheron Peninsula. arge percentage of the oilfields arc on thc Apsheron Peninsula and in the Caspian Sea along the coast of tho Peninsula. There is also oil along the Caspian north of the Apsheron Peninsula, south of Baku in the Kura River Valley, in western Azerbaydzhan in tbe vicinity of Kirovabad, and in Georgia. Thc largest Soviet refinery complex is located in Baku, which is the principal source in the USSR for lubricating oils. There are alsoil machinery plants in Baku.
The Transcaucasus has long been the most important oil-producing area in the USSR and still supplier approximatelyercent of the total crude oil produced in the USSR. Thereood harbor at Baku, and large amounts of both crude oil and finished products are shipped out on the Caspian Sea to other areas of the USSR. Fromajor oil port on the Black Sea. petroleum products are shipped not only to western areas of tho USSR but also to other countries,
* For serially numbered source references, uee Appendix E. ** Sec CIA Map No. .1 (First Revision., USSR: Economic Regions.
II. Production.
A. Azerbaydzhan SSR.
I. Crude Oil.
The postwar recovery of the Azerbaydzhan oilfields has not been so rapid as had been anticipated by the Soviet planners, and thc postwar production has not even approached the high production levels of thc years immediately before World War II. The gradual increase in the production of the Baku fields5 has been almost entirely the result of the discovery and developmentew highly productive new oil deposits rather than any significantin thc output of thc old fields. 27
The measures taken to increase the production in thc old fieldsiic resumption of drilling, the installation of new equipment, the introduction of secondary methods of production, and the likeave been only partially successful. 3/ In some fields, such as some of the Leninneft' fields, these measures have notably increased production, but in others they have served only to halt the decline or have had no appreciable effects.
During thc postwar period the prospecting organizations have succeeded inew new and important areas for The new offshore fields under thertemneft' and Gyurgyanncft', and thc fields of Buzovnyncft* in the northeastern part of thc Apsheron Peninsula have been by far the largest factors in thc increase in production/ Two otherirovabadneft'nd Kohystanncft'.hich also have been discovered and developed in the postwar period, have had little effect on the total production of Azerbaydzhan.
Thc estimates of the total production of crude oilare given in Table
* escription of the trusts, see Appendix A. ** P.elow.
The total production in Azerbaydzhan5 isto have rangedons. Therefore, thc frequently repeated statement in the Soviet press that0 plan goal ofillion tonsercent of5 production.omputed totalons, appears to approximate the actual production of crude oilhe estimated total production in Azerbaydzhan6 ranges0ons, which alsothe published report of an increase ofercent5 production,omputed total0 tons. There is additional support for thc latter figure in the fact that6 Azncfl' fulfilled its annualercentndons above/roduction that yearons. Therefore, becausederived from the data on total Baku production56 published by the Soviet press are within lessercent of the total of the production estimates for the individual trusts, the former are believed to be fairly reliable and haveused an the base for the percentage increases
Although the data for the individual trusts for the years6 were insufficient tootal production estimate by that method, there is some substantiating evidence for7 estimate as derived from the percentage increase figures. In7 the Buzovnyneft' Trust was reported to be producingercent of thc total Baku production./ The production of Buzovnyncfl'7 was estimatedillion Ions,ercent of the estimated total Baku production2 million tons derived from the percentage increase figures.
ft
The poor production rc-julishen the plan was fulfilledercent.roughtrastic revision in the plan for thcrars of the Fourth Five Year Plan. Instead of0 goalpercent increase50 total ofillion tons, as set in the originalar more reasonable goaiet. and the revised
* Seeelow.
which was reported fulfilled, epresented onlyincreasel_6/ No plan goals for the current
Five Year Plan have been published by the Soviet press. It is believed that planning is now being done moreear-to-year/ and that the goals set are more realistic. Long-range planning does not appear to be emphasized in the Soviet press.
Thc estimates of Baku production for thcave been made by an analysis of thc production of each trust during those years and by estimating rates of increase or decrease. The production increase for each year1 can be attributed almost entirely to the increase in offshore production.
The fact that the increasewas greater than the increases during preceding years was reflected in the last published report on production percentage increase. In the first quarter of
ercent increase over the first quarter0 production hadpswing in the rate of production increase is believed In the second half3 theith Ihc result that3 plan for production ofwas fulfilled by4
4 the trend observed during thc latter half3 apparently continued. The decline in production in the older Baku fields has continued at an even more rapid rate than previously, and Ihc offshore production is believed lo bc leveling off, with thc result that the4 production probably was at about3 level.
The outlook for the future development of the Azerbaydzhan oilfields will depend,arge extent, on ihe effort and capital the USSR decides to invest there. 3 the cost ofon of oilimes as great as Because of the complicated techniques, thc deeper drilling, and the extensive construction that will bc required to find and develop new deposits, it appears that the capital required to maintain the production at even its present level will continue to increase. It is believed, therefore, that Soviet policy
EfHFrF-
will be to maintain Baku productionevel sufficient to supply thc refinery complexes and distribution Hyslerrm that arc dependent on Baku crude oil. Estimated production of crude oil in. is shown in Table
The most important development in thc petroleumin the postwar period in Azerbaydzhan is the success in exploiting the oil deposits under the Caspian Fromffshore fieldsroducing anillion tons of oil, the offshore development has expanded to include at leastields with an estimated combined production ofillion tons3 (see The emphasis on offshore development was eflected in the formation in9 of thc Azmorneft' This association included theArtem Oil Trust with both its island and offshore- fields; Ihe^Bukhta U'ich Oil Field, which had previously been under the jurisdiction of the Stalin Oil Trust; the newly formed Gyurgyan Oil Trust; and the Exploratory and Exploilational Offshore Oil Drilling Although the Azmorneft' Association was liquidated in3 and its trusts returned to the Azncft't is apparent that thedevelopment has continued to increase rapidly, and thefor the future development of other offshore areas along the coast are more promising than the prospects in any other part of Azerbaydzhan.
The estimated annual production of crude oil from the offshore areas of Azerbaydzhan,. is given in Table* The estimates include the production from tbe Arlcm Oil Trust's three island fields, as they were included in Azmorneft's percentage increase figures. Their production, however, is believedery smalla maximumercent5 to lessercentf the total offshore
ollowa on p.ollows on
*** See Tableote b.
Table 1
Estimated Production of Crude Oil in Azerbaydzhan
Thousand Metric Tons
Total
Production
/
b/
c/
t
88
c/
969
f /
g/
720
W
720
h/
f
053
/
k/
1 /
95
mf
32
n/
76
of
05
of
65
p/
p/
A.
ons
increase0ons.
f . Oil and gas output1 was three and one half times thc output 1 productionons. Oiln production1 was,ons The gas
Tabic I
Estimated Production of Crude Oil in AzerbaydzhanContinued)
production is estimated to4 percent of the crude oil production8 gas-oilhe crude oil production is, therefore, estimated to2 tons. Substantiating evidence is the statementoviet publication that1 oil output was almost/
interpolation:
"The drop in oil production atbroughtalt/
Fourth Five Year Plan envisagedmillion tonsr This indicatesone
j. roduction of crude oilercent 6 production is0 tons, an increaseons. The Soviet press reported an increaseons
k. Production74 percent
1. Productionercentercentons0 tons. Production upercent.onsons. The .average of the two figuresons, m. Productionercentonsons, n. Production increasedercent in the course of the Fourth Five Year ercent ofonsons. production
Table I
Estimated Production of Crude Oil in AzerbaydzhanContinued)
ercentercentons0 tons. The average
of thc two figuresons.
o. By interpolation.
p. Estimates based on an analysis of the production of thc individual trusts andf the rates of increase or decrease (sec Methodology,
The offshore areas now undesexploitation include Artcm Island and the sea around it, particularly to the north; Zhiloy Island; Neftyannye Kamni; the Bukhta JPich; and Nargin Exploitation has recently begun on the Banka Darvina, far to the north of Artem There may also now be some produotion along the Buzovny coast and at Mardakyan, whereprospecting was begun soon after the It is believed that there is some production also from Peschanyy Island, which is inontinuation of the Zykh structure on the mainland.
Prospecting has been done on many other islands and in the open sea from Cape Kegna-Bil'gya in the north to thc mouth of the Kura River in the/ Geologically, this whole area appears very promising for future exploitation. Although there are many factors which make offshore drilling less attractive than drilling on land, such as the frequency of storms on the sea and the considerably greater outlay of capital required for offshore construction, the richness of these deposits sccmS to warrant the huge outlay of capital and effort involved. Furthermore, the relatively uncomplicated geologic structures in the offshore area virtually Insure that when they have been adequately studied, almost
-
every well drilled will produce oil. The new prospecting areas and the producing fields in the western part of the Apsheron Peninsula, on the other hand, are on geologic strurluresomplicated that even on some of the old fields virtually every well drilled is anwell, and the incidence of dry holes is far higher,esulting smaller return in production. It Seems probable,that the future development of the oilfields of Azerbaydzhan will continue to be predominantly in the offshore area, the onlylimiting factor being the depth of the
2. Natural (las.
Thc estimates of natural gas production in Baku arc based on the commercial consumption ofrather than on the quantity of gas actually available in thc fields. Large quantities of gas which could not bc processed or consumed immediately have customarily been allowed to escape into Ihe Only within the last few years has this practice .become less common.
Thc latest consumption figures available are thosehenons of natural gaa were produced in Azerbaydzhan.* There is no evidence to indicate that either the Georgian SSR or the Armenian SSR produces natural gas inquantities.
Thc chief consumers of natural gas inthe carbon black plants; the First GasolineGaku Gashich supplies thc city of
Baku; Azenergo (Azerbaydzhan Powernd the crude oil trusts and refineries. Less thanercent of the gas goes to other
i. Production Problems and Techniques.
At the end of World Warhe productive efficiency of the old Baku fields wasery low level. Before thc war it
* See Methodology. Appendix C.
II-
Estimated Production of Crude Oil from the Offshore Oilfields of Azerbaydzhan
of Total
Metric Tons)
Production
a/
77
b/
54
/
17
d/
89
e/
91
if
/ h/
h/ i/
h/ j/
/
Estimated.
two offshore fields of Stalinnefl' andwereons per total, Artem's Fields estimatedons perons for the year. Bukhta U'ich isto have producedons per day, about
ons for the year. The remaining fields of Artemncft* produceons for the
year. The total of Bukhta Il'ich) and Artem) is
ons.
interpolation.
0 wasercent
0 wasercent
production increasedercent60/
-
Table .'
Estimated Production of Crude Oil Irom the Offshore Oilfields of AzerbaydzhanContinued)
productionercent over
estimates are believed to includeof natural gas as well as crude oil.
i . Offshore production during theonths2ercent of theonths of
j. roduction at offshore fields grow by
k. This estimate la based on the belief that the rate of increase4 was not so great as it had been in preceding years. The history of the development of the older Baku oilfieldsapid increase in production during theears ofandharp decline sets In. It is believed that in the offshore oilfields developed earliest this decline is already beginning and that most of4 increase came from new wells in the Gyurgyanneft' fields.
had been common practice to rely .strongly on the newly drilled, highly productive flowing wells for most of the Baku crude oil The operation of the older wells was inefficient, and many of them were permitted to go out of operation entirely. During the war. when no new drilling could be done and pumps, pumping jacks, repair equipment, and other new devices for the technologicalof the old wells were unavailable, the rapid decline in Baku production was inevitable. Consequently, the efforts in the postwar period have been devoted not only to new drilling, by which production could be increased rapidly from flowing wells, bui also to the repair and technological improvement of the old
By far the most important effort to increase theof the old Baku fields has been the introductionarge scale of secondary recovery Because of inefficient methods of exploitation in the early years, the natural reservoir pressure was largely depleted and production declined, although considerable oil still remained in the deposits, estimated at as muchf the original
The results of the use of secondary recovery methods have not yet become apparent (usually several yearn are required for increases in production to be noted after secondary recovery methods have been instituted). There is evidence that in some fields the poor nbsorplivcncss of thc rocks may hinder the success of the It is believed, however- In viow ofalresdy noted in some-fields where secondary recovery methods have been employed for several- thatoil will be recovered in this way, but not in quantities sufficient to increase the total production pf_lhe old Baku fields.
4. Prospecting Trusts.
Geophysical surveying, exploratory drilling, and the preparation of new areas for commercial exploitation are the duties of several prospecting trusts. The Aznef tegeof izika (Azerbaydzhan Oil Geophysicsonducts all the geophysical aspects of oil prospecting, such as gravimetric and scismogruphic exploration, electric well logging, core sampling,and so forth. Thc Geological Prospectings believed to bc in charge of the preliminary shallow drilling operations in all prospecting areas. This trusl usually employs light mobile rigs for "Krelius" drilling, as this type of drilling is generally When most of theprospecting work has been completed, other prospecting trusts do thc final deep drilling and preparation of the new areas for exploitation.
The exploratory operations in the postwar period have been the least Successful of all drilling activities. Plan* for prospecting drilling have been consistentlyulfil led, with the
-
result that very few new deposits have been turned over for This failure to discover new deposits on thc mainland has been (he primary reason for the failure to increase the production there significantly during the last few years,
B. Georgian SSR.
Oil.
The annual production of crude oil in the Georgian SSR is relatively insignificant as to quantity. The discoveries made prior to World War II, which seemed so promising as to cause thc planners toons as the goalid not develop into the highly productive fields anticipate^ roduction had reached0eend productionhile it has been increasing more rapidly, is still believed to be no moreons per year at the present time. The Georgia Oil Trust fulfilled2nd3 itthc annual plan as early as It has continued to overfulfill the planith the production ofercent more oil in the first quarter4 than in the corresponding period The production of the Georgian SSR4 is therefore estimated at0ons.
The production of crude oil in thc Georgian SSRby the Gruzneft', Georgia Oil This0 and conducts all production and oilin It also owns and operates theat Lilo, which operates entirely on Georgian crude oil.production of crude oil in the Georgian SSR. shown in Table 3.
Localities.
In the Georgian SSR there are many prospectingwhere traces of oil have been/ but prospecting has
* ollows on p.
- IS -
Tabic i
Estimated Production o( Crude Oil in the Georgian
USSR
Metric
80
34
30
15
02
tl
95
g/
06
hi
:
10
;
to
to the nearest thousancT
reported9 percent of
83/
reportedercent over
84/
reported5 percent over
aily production forinpossible productionons in86/
f . Production reportedercent over
reported asercent over
reportedercent over0
-
lagged badly in both the prewar and lhe postwarJ/ Several areas where prospecting has been done since the war are Mlashis-Kheva and Iori, near Mirzaani and; Kavtis-Khev. near; and Cromy, in South/ Some small amounts of oil may be produced from some of these areas, but no discoveries of any importance have been reported.
III. Refining. *
A. Facilities.
Thc largest single refining complex in thc USSR is located in Region V, at Baku in Azerbaydzhan SSR. maller refinery is located at Batumi in the Georgian SSR,small crude oilplant is also located in Ihc Georgian SSR at Lilo, near Tbilisi. Thc present installed refining facilities at these three sites include nearlyillion tons of primary distillationillion tons of thermal and catalytic craeking capacity; and several specialty installations which produce such products as alkylbenzol. aviation alkylate, toluene, and benzene. These facilities are capable of producingillion tons of products per year. More thanillion tons of products can be produced at Baku alone.
Estimated throughput capacities of primary oil-processing units inre shown in Tabic
Thc facilities located at Baku consistefineries, an acid plant,atural gasolinend they include some of the oldest as well as the most modern facilities in the USSR.
* For documentation of the data given in this Section, secnd Methodology. Appendix C.
** Primary distillation capacity includes facilities used to distill mazut for lubricating oil stocks as well as facilities used to distill crude oil.
*** ollows on p.* See Appendix B.
-
>i
H f s
i
i
Thc Iwo Urges) refineries, Stalin and Andreyev, have5 million tons o( primary distillation capacity. Other important facilities at Baku include the new Thermofor catalytic cracking unit,illion tons of thermal crackingenzene alkylationyrolysis plants,ew unit tentatively identifiedisbreaking {light cracking) unit. lants which produce lubricating oillant which produces diesel fuel additive,easphalting plant. Presently under construction at Bakuropane de-waxing plant, two vacuum distillation units, and hot caustic washing facilities for treating jet fuel.
The Batumi refinery has aboutillion tons of primary distillation capacity,ons of-ihermal cracking capacity,ubricating oil treating plant.
The refinery at Lilo is believed to consist of0 tons of crude oil distillation capacity and ac.id-treating facilities.
B. Product Output.
4 the refineries inrc estimated lo have processedillion tons of crude oil and to have producedillion tons of products, an increasever the estimated production3 million tonsperations of thc oil refineries at Baku and Batumi8 and
re shown in Tablehe small refinery at Lilo produced an estimated total0 tons of distillate and residual fuels in
nd0 Ions Thc total output was consumed
within Ceorgia. and no estimates can bc made of output by product.
Thc refineries inull line of petroleum products, from aviation gasolineo bitumen. The Batumi refinery produces aviation gasolineO and its ethyiated counterpart, Most of Ihe aviation gasolines produced at Baku use straight-run gasoline as base stock. They are produced
* ollows on
-
at the Andreyev and Stalin refineries and range from0 loI30. Thc New Baku Refinery produces catalytically cracked aviation gasolines,nd
s the principal source of jet fuel in the USSR. Most of the jet fuel is produced at Baku and is believed to beat the Andreyev refinery. The Baku refineries are also the most important producers of lubricating oil in the USSR and arc the only known producers of turbine oil. Thendreyev. Stalin, and Dzhaparidzeull range of standard lubricating oils and greases. The total estimated production oftons probably is more thanercent of total Soviet production
C. Expert mental Developmcn t.
The Azerbaydzhan Scientific Research Institute has done significant work at Baku in investigating new refining techniques and developing additives for improving the-qoality of petroleum products. Experimental plants for the investigation of catalytic cracking, hydrogenation. and hydroforming processes have been constructed in the postwar period. It is believed that the catalytic unit began investigationluid catalytic cracking process in the first half An experimental lubricating oil plant also is in existence and is used to develop special oils and lubricating oil additives. The experimental units at Baku are important as an indicator of thc degree of technological advance which Soviet engineers have attained and also as an indicator of the possible future direction of refining operations, not only in Baku, but in thc whole of the USSR.
IV. Distribution.
The principal distribution centers, for petroleum inre Baku, on the Caspian Sea. and Batumi, on the Black Sea. These two centers, both the Sites of petroleum refineries, supply most of thc requirements of the Transcaucasus Republics and, in addition, ship petroleum products to all other areas of the USSR, to thc European Satellites, to CornmuniM China and the Asiatic
Satellites, and to many non-Bloc countries. The production of the small refinery near Tbilisi is distributed for local consumption within thc republic of Georgia.
A. From Baku.
The largest concentration of petroleum production andactivity in the USSR is located in the vicinity of Baku. the volume of petroleum shipping from this area is extromely large. Shipments consist of crude oil, semifinished (partially refined) petroleum products, and finished petroleum products and areby rail and sea.
Rail shipments of finished petroleum products consistof bulk shipments made in tank carsmall quantity of packaged products shipped in freight cars and include the full range of products produced by the otal rail shipments of crude oil and petroleum-products amounted to aboutillion tons, including aboutillion tons of finishedndons of semifinished products and crude oil. / Rail shipments4 amounted to abouttons, /ercent of8 figure, and includedillion tons of finished products andillion tons semifinished products and crude oil. / Shipments by freight car, included in the totals for finished products, amounted to0 tons/ and are believed to have increased to at0 tons/ ore thanercent of the rail shipments went to destinations within Region V, / and it is believed thats still (he principal recipient of rail shipments. Rail shipments to areas outsidenclude those for Communist China, thc Asiatic Satellites, the European Satellites, and Finland and consist primarily of lubricating oils and greases and aviation fuels. / ln addition, some productsprimarily distillate and residual fuels are shipped by rail to Batumi for transshipment by water to other ports in the USSR and to other countries. / Rail shipments of semifinished products and crude oil from Baku include shipments of straight-run mazut and transformer distillate to/ and Siazan crude oil to the Gro/.nyy refineries, /
Estimated sea shipments of crude oil and petroleum products from Baku, by port of destination.re shown in Table 6.
* ollows on
-
Tabic 6
Estimated Sea Shipments of Crude Oil and Petroleum Products from Baku
by Port of8
Million Metric Tons
Makhachkala Astrakhan' Krasnovodsk Gur'yev Total
3
Crude
Mixed
Gas
0
Astrakhan1 received overercent of the finished products for transshipment to supply other areas. Approximatelyercent of the total received at Astrakhan' consisted of tractor kerosine. / Makhachkala received products for transshipment by rail and pipeline and charge stock for the Groznyy refineries./ Krasnovodskfinished products primarily for transshipment eastward, and Gur'yev received only charge stock for the refinery located there./nformation is not available to permit quantitativebut it is believed that the pattern of sea shipments has remained thc same and that the level of shipments probably has not increased moreercent./ Any increase that has occurred probably hasesult of increased availability of finished products.
Before World War II, Baku and Batumi were connected by two pipelines; one,nch line completedad an annual capacityons, and the otherinch line completed There is considerable evidence that since the war only one pipeline, thench line, has been in use and that it transports charge stock to the Batumi refinery. / It is possible that during the warinch line may have been dismantled for
-
/ 8 thc pipeline carriedons of mixed oils. / Since that time it is believed that thc pipeline has been switched to transporting crude oil from the Baku fields and from the Kazan-Bulag field. It is assumed that4 the pipeline operated at or near its capacity.
Conslructioninch pipeline from Baku to Batumi was being planned1nd actual work on the line probably has begun. / It is not known whether this line will be used to transport crude oil or petroleum products, but in view of the large surplus of petroleum products at Baku, it probably will be used to transport petroleum products.
B. From Batumi.
Petroleum products arc distributed from Batumi by rail and sea to areas within Region V, to other areas in the USSR, and to other countries.
Rail shipments8 amounted toons, of which nearlyercent is estimated to have been shipped toin Georgia./ Limited information/ suggests that rail shipments4 probably amounted toons. Most of the rail shipments probably went to Georgia.
Sea shipments of petroleum from Batumi go to Odessa and other Soviet ports on the Black Sea, to the Soviet Far East, and to consumers outside the USSR. Total shipment by water8 is estimated to have amounted toons./ Nearlyercent of this total was,shipped to Odessa, andery small amount (lessercent) is believed to have been shipped for export. vailable information on total sea shipments from Batumi is very limited. It is known, however, that one particular category of these shipments, the shipments for export; has increased significantly. xports amounted toons, includingons shipped to norv-Bloc Export shipments4 increased even more significantly and are estimated to have amounted loons.
- 25
of whichons were exported to non-Bloc countries. / Shipments from Batumi to the Soviet far East amounted lo aboutons. / Total sea shipments4 probably amounted toillion tons.
V. Consumption.
Practically all of the petroleum products consumed withinre supplied by the refineries located within the region at Baku. Batumi,lo. Products from Baku are consumed in all three of the Republics, products from Batumi supply Armenia and Georgia, and thc small output from Lilo is consumed entirely within Georgia.
*
A. Armenian SSR.
Distribution in thc Armenian SSR is carried out by thc oil sales directorate at Yerevan and its aubordmaie bases./ Armenia has no indigenous source of petroleum supply and isdependent upon rail shipments from Baku and Batumi. Civil consumption8 is estimated to have amounted toons, / of which aboutercent was supplied from Batumi'and aboutercent from Baku. / The productswere principally motor gasoline, heating mazut and kerosinc,mall quantity of miscellaneous lubricating oils./ onsumption has increased, and the relative importance of Batumiource of supply has also increased slightly./ Consumption4 probably amounted toons of petroleum products.
B. Georgian SSR.
Two oil sales directorates are located in the Georgian SSR. at Tbilisi and/ The directorate at Batumi is subordinate to the one at Tbilisi. / Petroleum requirements for the republic are met by the three refineries located inlus smaller shipments from refineries outside the region. / Consumption
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*TOPSECRET-
in the republic8 is estimated to have beenons.* More thanercent of thc estimated total, including all of thc heating mazut requirement, was supplied from Batumi. Principal products consumed were mazut, motor gasoline, kerosine, and diesel fuel, / arge part of the mazut probably is released at Batumi to the Merchant Fleet, the largest single consumer. / Consumption in thc Georgian SSR is believed to have increased toillion tons The "available supply includedons of products from sourcesof Region V,/ including fairly sizable quantities of heating mazut, which was also supplied from both Baku and Batumi./
C. Azerbaydzhan SSR.
Thc major portion of the products consumed within Azerbaydzhan SSR is supplied by the refineries at Baku. mall quantity of special products is supplied from other areas,/ and recently heating mazut has also been supplied from other areas to consumers within thc republic./ Products are distributed by rail and by local release through the oil sales directorate at Baku and its subordinate bases. Civil consumption within the republic is estimated to have amounted toillion tons Thisillion tons of products released locally at/ andons shipped by rail./ The limited available information8onsiderable increase/ Total consumption4 is believed to have increased to aboutillion tons. It is believed that atons of this total were heating mazut supplied from refineries outside Region V,/ Consumption of mazut8 accounted for at leastercent of the/ and pr*obably stillignificant part of the total consumption./
* Thia figure is derived as thc sum of thc estimated rail shipments from Baku and/ barge shipments from Batumi,/ local release at/ and the production oflo refinery.
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VI. Supply Balance.
he production ol crude oil inasons. The refineries at Baku consumed6 million tons, andons were shipped by pipeline to Batumi. In addition, rail shipments of crude oil lo Batumi refineries probably amounted toons. The Small production of crude oil of the Georgian SSR was consumed entirely within the region. The total consumption of locally produced crude oilherefore, amounted to2 million tons,ercent of thc total Shipments out ofy rail and sea from Baku totaled aboutillion tons and went primarily to supply the refineries at Groznyy and Gur'yev. Although Baku ships excess crude oil out of the area, some crude oil is imported by may of-thc Black Sea for thc Batumi refinery./ These imports probably do notons per year. Difficulties in transporting crude oil from Baku to Batumi probably account for thc simultaneous import and export of crude oil from the region.
The refineries ofupply all of Ihc requirements of the region except for heating mazut and small quantities of special products. In thc past few years, consumption of heating mazut has increased while production has decreased, and fairly large quantities of this product have been importedn particular from Kuybyshev and Makhachkala. In view of the large production capacity of thc refineries, this suggests that the quality of thc crude oil inakes it advantageous lo limit the production of healing mazut in favor of other, more valuable products.
After internal requirements are^mel,urplus of petroleum products amounting to aboutillion tons. Most of this surplus is produced by the Baku refineries. Baku ships products by rail to all areas of the USSR, to Sino-Soviet Bloclo Finland, and to Batumi for transshipment by water. The shipments consist primarily of lubricating oils and special products. Rail shipments from Batumi out ofre negligible. Sea shipments from Baku to the Caspian ports of Astrakhan. Makhachkala, and Krasnovodskarge part of the available output. These
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shipments can be transshipped to supply tbe area along the Volga River, Soviet Central Asia. Siberia, the Far East, and thc western part of the USSR. Sea shipments from Baku include most of the products produced by the refineries. Sea shipments from Batumi include products from Baku and go primarily to Odessa, to lhe Soviet Far East, and for export to non-Bloc countries.
VII. Capabilities, Vulnerabilities, and Intentions.
A. Capabilities.
Thc future development of the production of crude oil inill depend upon the amount of effort and capital invested. Production could be increased but only wifffa large expenditure of capital. It seems probable th'at production will be maintained at approximately the present level, which is sufficient to supply the refineries that are dependent upon Azerbaydzhan crude oil. The greatest emphasis will be placed upon the Development of the offshore oil deposits, where the return on the capital invested is greater than it is on the mainland.
During theears the refineries ofave stressed the improvement of the quality of petroleum products rather than an increase in quantity. No further major refinery construction in the region is anticipated. The Azerbaydzhan Scientific Research Institute of the Oil Refining Industry hasin Baku pilot, or experimental, plants for the investigation of catalytic cracking, hydrogenalion. and hydroforming processes and an experimental lubricating oil plant. It is believed that this experimental development will be an important indicator of thc future direction of refining operations.
The significant increase in lhe export from Batumi ofproducts to countries outside the Soviet Bloc which developed3robably will continue as long as the USSRoncerted effort to participate in world trade. The major share of the Region's surplus of petroleum products will continue to contribute to the supply ol the requirements of the Soviet Bloc, and Ihc region
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unquestionably willominant factor in the petroleum economy of the USSR.
B. Vulnerabilities.
The greatest weakness of the petroleum industry ins its extremely vulnerable location, bordering on Turkey and Iran. The great concentration of refining facilities and producing fields in and around Baku add lo the locational vulnerability.
C. Intentions.
The maximum output of the highest octane grade of aviation gasoline, t Baku has not been Detained possiblyof the small peacetime demand for it. In the eventartime emergency, however, the output of high-octane aviation gasolines and jet fuel could be greatly increased at the expense of other products, particularly motor gasoline, lampd tractor fuel. hift in product emphasis mightlear indicator of military intentions.
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t-.CRKI
APPENDIXRODUCTION TRUSTS IN REGION V*
). Azerbaydzhan SSR. a. Azizbckovneft*.
The Azizbckovneft' trust has five/ and has been producing crude oil 6 ii was the second largest producer in Azerbaydzhan. / Production has declined since that time. / and4 the trust probablyTtoduced lessillion tons. The trust is also an important producer of natural gas, which it supplies to the carbon black plant in Bina. /
b. Artemneft'.
Thc Artemneft' trust is composedn Arlem Islandffshore fields./ It hasonsistently good producer during the postwar period,nd the observed general increase in production has been primarily from Ihc offshore fields, / Production from this trust amounted toonsroduction has continued to increase and4 may have amounted toillion tons.
t'.
Gyurgyanneft' trust was established/ and consists of three fields located at Neftyannye Kamni and Zhiloy Island in the Caspian Sea./ The production of this trust has increased rapidly,/ and it appears that it is now the largest producing trust in Azerbaydzhan. Its production mayillion tons per year.
* Production estimates for individual fields include natural gas Additional information on the geology, operations, and prospects of the individual trusts and fields ins available in detail in CIA files and is the basis for the information presented here.
TO/'
i
The Buzovnyneft' trust, which nowields,/ was origin.illy formed5ields which had formerly belongedninneft' and Azizbckovneft*./ Production increased rapidly at first but began to level off Since that timemall increase is believed to have occurred, principally in the/ and production probably has not greatly exceededillion tons. Most of the past difficulties of the trust seem to have resulted from technological problems. /
*
The Kaganovicbneft* trust seems toTiaveecline in production in thc postwar period./ Total production from nine5 is estimated to have beenillion tons. / The trust now has only six fields, jjj/ and its production is believed to be lessillion tons. The declining trend is expected to continue because the trust has very fewareas where new deposits may be discovered.
f . Ordzhomkidzeneft1.
Thc production of crude oil of the Ordzhomkidzeneft1 trust declined slightly/ and the decline probably continued mall increase has been noted since that time,/ and production has probably risen to aboutillion6 level. The trust consistsields,f which arc thc old Surakhany fields./ No substantial increase in the production of this trust is expected.
g. nneft'.
Thc Balakhany-Sabunchi-Komony fields, which form the Lcninncft' trust, are both thc oldest and3he largest
* In4 it was reported that tbis trust had been merged with the Ordzhomkidzeneft' trust.
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producing fields in the USSR. The trust hasields. / andsome wells which are as much asrears old./ Recovery in the postwar period was goodhen" the trust failed to fulfill its plan,/ The present level ofis believed to be slightly lessillion tons, but unless valuable new oil deposits areradual decline In production will probably occur. The (rust has also produced fairly significant quantities of natural gas./
h. Stalinncft1.
Production of the StalinnefC trust is from the old Bibi-Eybat and Bukhta Il'ich/ The trust consistsf which are located on land on fh>field. / The ninth field is theBukhta Il'ich field including the offshore area which has been extended far out to/ Thc major portion of the present production, which is probably aboutillion tons, is believed.lo come from the offshore area, although the Introduction of secondary recovery methods has resulted in some increase in production at the old fields./
l. Kirovneft'.
Production of thc Kirovneft" trust lagged in the immediate postwar/ but9 is believed to have increased slowly and steadily until it probably nowillion tons annually. The steady increase is believed to result from theof promising areas discovered just before World War II. / The trust has six fields./
j . Molotovneft'.
The Molotovneft' trus( has nevon oill thc former Ke iquidated in
y The record of thehe postwar period has been poor. nd thc annual production It believed to be lessillion tons. It has been,ood producer of natural
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gas. / must ol which is consumed at the rbon black plant at/ and the (urnace black plant at uta./ The production ofrust is not expected to increase.
k. Kirovabadneft'.
The Kirovabadneft' trust was formed/ andthe production of the Kazan-hulag/ and possibly thc Naftalan deposits./ Production has neverons and4 was probably insignificant.* The Kazan-Bulag and Naftalan deposits are connected lo the Baku-Batumi pipeline.
I . Neftcchalancff.
The Neftechalaneft' trust operates in the lower valley of the Kura River. In the postwar period thc trust has expandedield immediately after the/ields/ Its production is still small, probably lessons, but developments in the next few years should determine thc future importance of this area. The planned/inch gas pipeline0 from Neflechala to Baku indicates the discovery of large gas reserves which will be exploited upon completion of thc pipeline.
m. Siazanneft'.
The Siazanneft1 trust, consisting of only oneormed/ and production4 wasons.
it
n. Kobystanneft'. **
Production in the Kobystanneft' trust began/ and is believed to bc quite small. The trust consists of only one/
* Inhis trust was not mentioned among existing trusts.
!* ln4 it was reported that this trust had been merged with the Moioiovneff trust.
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APPrJNDfX B
PETROLEUM REFINERIES IN REGION V
1. Baku
imeni Stalin./
Refinery imeni Stalin is the largest refinery in Baku and is located in Belyy Gorod, adjacent to the Andreyev/ It has anillion tons of crude oil distillation/ andillion tons of mazut/ Other facilitiesubricating oil contact treating plantasoline-ligroine treatingax Miller furfural lubricating oil treatinghree additive/ropane deasphalting/ The refinery is thc largest producer of lubricating oils in the/ It also produces/ and diesel/ It is believed that most of the light product blendingparticularly as regards the quality grades of aviations carried out at the Stalin refinery.
imeni Andreyev,/
The Andreyev refinery is thc oldest refinery in/ and is located in Chcrnyy/ it hasillion tony of crude oil distillationnd aboutillion tons of mazut distillation/ Other facilities include acid and caustic treatingoap naphtha/lant to produce acid contact/ The refineryprincipally distillate and residual fuels, including aviation gasoline base stock, aviationet fuel, ligroine, kerosine. diesel fuel, and various/ It also produces some lubricating It is believed that the Andreyevis the only refinery at Baku producing jet fuel. Facilities for hot caustic washing of the jet luel fractions are underat the/ Thc maximum jet fuel production of the refinery probably isillion rons.
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New Baku Refinery. NBNZ. ZSlf
Construction of Ihc Baku Refinery. NBNZ, began8 in the northeastern suburbs of Baku near/ The refinery was in operation by/ andhermal cracking plant completed/atalytic cracking plantin/ It is believed toatalytic cracking capacity ofons per/hermal cracking capacity ofons per/ Other facilities are believed toatalystas recoveryhermal reforming/hermal depropanizing/ This refinery is tbe only source of aviation gasoline/ innd has also produced catalytically cracked aviation gasolinether products probably include motor naphtha (to be used in blends of motorracked ligroines and kcrosineS, and fuel oil. The catalyst plant is believed to be capable of producingons of pellet-type catalyst per/ and2 andt made catalyst for thc cracking unit at/
d. Baku Cracking Plant imeni Vano Sturua,/
The prewar Vickers and Winkler-Koch units of this plant were completely reconstructed and modernized during World War/esultant increase in throughput capacity of about/ Thc present thermal cracking throughput capacity of these reconstructed facilities is believed lo heillion tons per year. ew unit constructednd known as the "Spcts"/ is believed tohermal/robable annual throughput capacity'of0ons. The plant alsoatalysthich has produced "powder"/ The refinery produces cracked motor gasoline, cracked ligroine and keroslne, diesel fuel, coke, and/ It also treats and prepares thc coke benzol charge for thc benzene alkylation/
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tot-secret-
Refinery.
Refinerysistillation plant and has the most modern distillation equipment in/ Facilitiestmospheric distillation/ with an estimated capacity ofillion tons perasoline-stabilizing and gas-fractionating/ andcsalting-dehydrating (ELOU)hc refinery probably produces the usual straight-run products such as gasoline, ligroine, kerosine. and mazut or gas-oil.
( . Refinery imeni Dzhaparidzo,/
Refinery No.istillation capacity off mazut per/ Other facilitiesax-processingnd an acid recovery/ The principal productrefineryrightstock base/ It also produceslubricating oils.
g. Baku Solid Lubricants (Crease) Plant/
Plantsulk grease plant producing solid lubricants from petroleum or vegetable oils. Its output includes products such as/ gun and rifle/ shoe// and cable insulation/
Benzene Alkylation P'agJjo^Jg- il6/
Plant No. onsistsnits. sing sulfuric acid as/sing aluminum/ The two units probably canaximumons of alkylbenzol per/ They operate on benzene from the Budcnnyy refinery and coke benzol from the chemicals/
i . Refinery imeni/
Refineryonsists of two reconstructed pyrolysis/ew pyrolysis plant constructed/ The throughput capacity of the three plants probably does not exceed
R^r
ons of kerosinc distillate charge per/ The reiinery produces pyrobenzolixture of aromalics usedomponent in aviation and motor/// and green/ The gas from the pyrolysis units. Pirogax,ource of olefins for thc beneene alkylation units and is also burned to produce carbon/
j . Sulfuric Acid Plant imeni Frunze.
The original Frunze plant completed/ has been reconstructed. It contains Lurgi, Frischer, and ChemCo equipment and is believed to be capable of producingons of sulfuric acid per/
k. Natural Gasoline Plants, Nos. 2. nd/
2. Georgian SSR.
imeni Stalin./
Refineryas anillion tons of crude oil distillation/ons of mazut distillation/hermal cracking capacity ofons per/ It produces aviation gasoline0et fuel, motor gasoline, tractor kerosine. diesel fuel, engine fuel, fuel oil. asphalt, and some of the basic lubricating/
Refinery.
The Lilomall-crude oil distillation plant, is located in/ Its maximum throughput capacity probably docs not0 tons of crude oil per/
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APPENDIX CI
METHODOLOGY
The major quantitative estimates contained in this report are based on detailed studies which, because of thc bulk of the data involved, it would bo impracticable to publish as parts of the report. Those studies have been compiled in fully documented appendixes which arc available in the files of the responsible branch of ORR.
The estimates of production of petroleum in Economic Regionderived from studies of the individuaT-production trusts in Estimates of the production of petroleumbased on studies of the individual refineries in theestimates of distribution and consumption arcall availableshipments
of petroleum and petroleum products from Baku and Batumi by sea. rail, and pipeline and on the activities of the various Oil Sales Directorates.
In addition to the data on production trusts, refineries, and shipments, the appendixes on file contain information on prospecting trusts, industry organization, classification of crude oils, and the kinds of petroleum products produced by thc refineries.
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APPENDIX D
GAPS IN INTELLIGENCE
TM principal gap in intelligence on the petroleum industry in Economicf the USSR is the general lack of information Although there has been some valuable information regarding refinery construction since that time, there have been virtually no reports of crude. oiJ production. Other specific gaps, where information is almost entirely lacking, include crude oil imports into thereakdown of shipments of crude oil and semifinished products by rail and pipelinend information regarding the ultimate consumers of the petroleum products.
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p
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Original document.
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