Papers - Production - Foregin - Russian Oil Industry in 1937

During 1937 the Russian oil industry made very satisfactory progress in its exploration branch and added considerably to its proven reserves in the older producing districts, while several entirely new potential areas were opened for development by discovery wildcats. The exploitation of known fields, however, suffered greatly from internal political difficulties, referred to as "sabotage," and was also seriously handicapped by the requirements for national defense under the duress of a grave international situation. More particularly, the necessity for preparing for a major war resulted during 1937 in short-rationing of the oil industry in its iron, steel and rubber requirements, affecting quantitatively drill pipe, casing, tubing and the rubber equipment of automobiles, and qualitatively much of the oil-field machinery for which it was either impossible or difficult to obtain iron or steel of required specifications, which necessitated manufacture of heavier and unwieldy equipment and caused directly and indirectly an unavoidable major curtailment of drilling operations below the planned footage. War-preparation measures during 1937 also required accumulation of a large gasoline reserve in the Vladivostok area and inasmuch as shipments from California can be made much more cheaply than from Caucasian refineries, either by tank cars across Siberia or by tankers via Suez Canal and Indian Ocean, some 2,000,000 bbl. of gasoline was imported from the United States in the past year, resulting in a decline of 46.98 per cent in net exports of all petroleum products from Russia below the 1936 net export volume, which is the lowest level since 1925. Production of crude oil during 1937 is estimated at 212,742,000 bbl. as compared with 202,543,700 bbl. produced in 1936, an increase of 5.04 per cent, but 11 per cent below the planned output. There were no major readjustments as to the source of crude-oil production, Baku district still accounting for the largest share; that, is, 77.21 per cent of the total. Exploration operations were outstandingly successful during the past year, major discoveries having been made on the Apsheron Peninsula, in Grozny and Maikop-Kuban districts, in Ural-Permian Basin, in Middle Volga-Samara district and other areas.