No. 1, 2010

The 40th anniversary of the Soviet Government resolution on Accelerating Oil Industry Development in Western Siberia

It was more than half a century ago that a unique fuel and energy complex had been launched in the north of Western Siberia, the biggest one both in Russia and across the world, which provided 65% of nationwide production of crude oil and 63% of natural gas by the mid-1980s. Its establishment and subsequent operation became indeed an epoch-making event of the last century.

Situational alternative

In the early 1960s, news about oil fields discovered near Tyumen shook the world. Reports from Siberia were discussed at a NATO Council session and a convention of American oil producers. However, they failed to cause adequate response from the Soviet elite. History repeats itself: in the 1930s, Soviet leaders underestimated oil production prospects of the Volga-Urals area and in the 1960s they would not believe in the huge hydrocarbon capacity of Western Siberia. According to Boris Scherbina, first secretary of the Tyumen Regional Committee of the Communist Party from 1961 to 1973, "the scale, rates, and geography of oil and gas production remained uncertain throughout the 1960s."

Forty years after the start of Tyumen oil fields' commercial development, former Chairman of the Gosplan (State Planning Committee of the Soviet Union) Nikolay Baybakov noted: "It was obviously difficult to achieve even a modest increment in oil production in the ‘old' regions, while its sharp drop seemed inevitable in the future. In the context of insecurity that had emerged by the mid-1960s, Tyumen was an especially promising area. It promised salvation." However, judging by the Government's behavior, they would not believe in this "Tyumen salvation" at first. The doubts about Tyumen oil that the country's leadership had in the 1960s were expressed by Deputy Chairman of the USSR Council of Ministers Mikhail Yefremov at a meeting in Tyumen in late 1967: "To begin with: ‘Is there any oil in Tyumen?' Another question: ‘What about building conditions there?' and ‘Who would go to work there?' And, finally: ‘How much that oil would cost us? The costs will be very high'."

Former Secretary of the Communist Party Central Committee Viktor Dolgikh, then in charge of heavy industry and energy development, including the establishment of the Western Siberian Oil and Gas Complex (WSOGC), later told how directives on Tyumen oil had been developed: "Life itself raised relevant questions. A certain issue would be formulated by the Regional Committee of the Communist Party to be then thoroughly examined with the involvement of ministries, local authorities, related departments of the Gosplan, and the academic community. After that a pertinent memorandum on the issue would be drawn up and presented to the Council of Ministers and subsequently - where a resolution was to be passed by the Central Committee or the Cabinet - a decision in principle would be made by the Politbureau. Then the Gosplan would be given an assignment to work out the issue in detail jointly with the relevant ministries, departments, and local Soviet, economic, and Communist Party authorities. Once the ‘issue' was ‘ready', the Council of Ministers would refer it to the Central Committee for endorsement and final approval. This procedure is not as cumbersome and excessive as it may seem. This kind of document needed to be worked out with a view to the actual capacity of the country and the economy, and the available resources."

Scientific conferences on the productive forces' development in the Tyumen and Tomsk Regions largely contributed to the formulation of tactics and strategies for launching oil and gas production in new areas. These were initiated by the Tomsk authorities who applied to the USSR ministries of geology and petroleum industry, the Gosplan and the Siberian Branch of the USSR Academy of Sciences for support in defining the development prospects for industries that were novel for the Tomsk Region. In 1966 and 1968, workshop conferences attended by top officials from ministries and departments and leading experts and scientists were held in Tomsk, and in April 1969 in Tyumen. Relying on science-based recommendations the Tyumen and Tomsk Regional Committees of the Communist Party repeatedly submitted to the CPSU Central Committee and the Gosplans of the USSR and of the Russian Federation requests and proposals on key issues of oil and gas industry development.

The starting point

Finally, on December 11, 1969, the Central Committee of the Communist Party and the USSR Council of Ministers passed the Resolution on Accelerating Oil Industry Development in Western Siberia, which defined the objectives of the new fuel and energy base to be set up in the USSR in the form of oil production targets for 1975 and 1980. The document identified a set of related tasks to be solved in order to achieve the economic goals of the oil fields' development. It provided for 100 to120 million tons of oil to be produced in Western Siberia in 1975. The objective of outperforming Tataria, as experts recall, seemed unattainable as it took Tataria, the main oil producer in the USSR (in 1956-1973), with its better natural and climatic conditions, 23 years to achieve annual production of 100 million tons (Tataria reached that target by the end of the 8th five-year plan period), while in Siberia they had to make it in just five years. Enormous human, research, financial and physical resources had been mobilized in order to achieve the set objective.

The 1969 Resolution designated the executing agencies of the program to develop its sectoral sections during 1970, including schedules for basic facilities' commissioning to be subsequently agreed. The program was implemented in the context of sectoral management, which proved effective at the initial stage and made possible accelerated development of the oil and gas, energy, transport and construction industries. The document provided for the development of the oil industry in Western Siberia on the basis of the latest achievements of science and technology, with cutting-edge high-performance techniques to be applied in oil field development and drilling, with extensive automation and mechanization of all production processes, and the use of efficient equipment.

The fact that decisions had been taken both on the level of Central Committee and Regional Committees of the Communist Party was due to personal visits to the new project sites by country and Tyumen and Tomsk region leaders, as well as top government and ministerial officials. "Whenever they ask me how many visits did I make to Tyumen," Viktor Dolgikh says, "I would recall that during my 16-year work in the Central Committee I visited Ukraine, for instance, three or four times, to compare with the many visits to the Kursk Metallurgical Works, the Novolipetsk plant, to Karaganda or Kuznetsk... But all these taken together would make less than the number of trips to Tyumen."

The key line of oil policies

The Directives given by the 23rd Congress of the Communist Party concerning the 8th five-year plan of economic development (1966-1970) attached priority to Western Siberia: "The development of the oil and gas industries should be accelerated. The paramount objective should be creating new oil and gas producing centers in Western Siberia and Western Kazakhstan, and significantly increasing oil output in old oil-producing areas." Alternative projects, along with the Siberian project, looked as follows: creating the country's new oil-producing base in Kazakhstan; focusing on oil field development in the Timan-Pechora oil- and gas-bearing province in the Autonomous Republic of Komi and the Arkhangelsk Region; extensive development of Caspian oil fields.

All doubts concerning Western Siberian oil had finally disappeared only by the end of the 8th five-year plan period when oil production in the region reached 31.4 million tons (1970), while its price proved to be lower than the USSR average. There were no longer any fears that oil production to be developed in Western Siberia would require excessive investment and unaffordable volumes of construction.

In order to have first-hand information on the actual state of affairs Soviet leaders visited the area, including USSR Council of Ministers Chairman Alexey Kosygin, deputy chairmen on the Councils of Ministers of the USSR and of the Russian Federation Nikolay Baybakov, Veniamin Dymshitz, Boris Scherbina, Ivan Arkhipov, and Yury Batalin, and ministers Alexey Kortunov, Valentin Shashin, Sabit Orudzhev, and Vassily Dinkov. They provided comprehensive and effective support. In April 1971, the 24th Congress of the Communist Party adjusted the Western Siberian oil production target for 1975 to be 120-125 million tons. A meeting led by Alexey Kosygin, held in January 1973 in Tyumen, decided to raise oil production in Tyumen up to 135-145 million tons by 1975.

The process was based on complete mutual understanding between Alexey Kosygin and the head of the Main Tyumen Production Department for the oil and gas industry (from 1965 to1977) Viktor Muravlenko, and other executives of the Western Siberian oil and gas complex. It is generally known that history is largely determined by the subjective will of individuals, especially national-scale decision-makers. "Alexey Kosygin excelled other Politbureau members in competence, expertise and intellect," says Yury Batalin, head of oil and gas complex construction and development in Western Siberia in the 1970s and 1980s. Alexey Kosygin, twice Hero of Socialist Labor (1964 and 1974) and a government leader who had outrun his time, made a major contribution to the creation and development of the Western Siberian oil and gas complex.

Owing to sizable investments, advanced technologies and skilled workers, the rate and scale of field development unprecedented in history had been achieved in Western Siberia. In the 1970s, oil production doubled in the Soviet Union, while in the Nizhnevartovsk District of the Tyumen Region, it grew tenfold, and hundreds of times at the Samotlor oil field (the biggest one both in Siberia and the Soviet Union). Instead of the 100-120 million tons of oil planned (for 1975) in December 1969, Western Siberia produced 148 million tons of crude. The 1980 target figure of 260 million tons was exceeded by 52 million tons to reach 312 million tons!