Russia's troubled oil industry

Neste's crude oil supply programme has undergone a major shift in emphasis in the last couple of years with the replacement of the former Soviet Union as Neste's major supplier by the North Sea and the Middle East. This change has been a result of both availability problems and tougher sulphur content regulations. This year Neste expects to import around 1 million tonnes of crude oil from Russia, out of a total crude input of some 9 million tonnes. The former Soviet Union nevertheless remains the world's largest single oil producer. Output, which began its latest decline around 1988 is still dropping, however Maintenance-related problems, for example, mean that a large number, of wells are regularly out of commission. Production difficulties at the end of the 1970s led to an increased role for Western Siberia. The pressure put on oil organizations to get results resulted in a greater focus on developing existing fields rather than exploring for new reserves, or introducing good field husbandry and enhanced recovery techniques. A drop in production in 1984 only further increased the pressure on producers. The break-up of the Soviet Union and the economic repercussions associated with this, including the continuing gulf between prices and production and development costs, have further exacerbated the situation