Production - Foreign - Russian Oil Industry in 1938

During 1938 the Russian oil industry, while able to increase its production 4.69 per cent above the preceding year, was not successful in correcting some of its basic difficulties, and the industry's position as it entered 1939 was unsatisfactory. The internal political difficulties of 1937 and 1938 took a toll in the oil industry as they did elsewhere in the U. S. S. R., further complicating the solution of the problems facing it, most important of which still remain: lack of experienced and responsible leadership, able to make quick decisions; undisciplined and migratory labor; and insufficient and often unsatisfactory quality of the various equipment needed by the industry and its ineffective distribution. Recent developments in the U. S. S. R. suggest that during 1939 the management will be granted more latitude and hence somewhat better results may be anticipated from the executive branch, provided, however, the "purges" do not recur. The labor should be better disciplined and should not shift as easily, owing to the introduction, at the close of 1938, of individual labor passports to all workers in the country, the principal purpose of which is to correct those two deficiencies. It is not anticipated, however, that the service of supply will show any appreciable improvement in 1939, partly because of inherent difficulties and partly because the manufacturers of heavy machinery are working primarily and necessarily for munitions. Production Production of crude oil during 1938 is estimated at 224,714,000 bbl., as compared with 212,742,000 bbl. in 1937, an increase of 4.69 per cent but 12.76 per cent below the planned output. While there were no major readjustments in the source of supply of crude oil, both the older districts, Baku and Grozny, were barely able to maintain their 1937 levels of production, the increased output being supplied primarily by the fields of Maikop and Ural Permian Basin districts. While exploration work was outstandingly successful in 1937, in 1938 no discoveries of any