499 
expectations climbing from less than 124 billion cubic feet in 1970 
to about 265 billion cubic feet in 1974. Gas production is expected 
to exceed 282 billion cubic feet in 1975 and the target for 1985 
is 424 billion cubic feet. 
The Soviet Government’s decision to invest significantly more 
capital in offshore exploration and development during the 1976 to 
1985 period accounts for the optimistic new production forecasts. 
There are indications that the U.S.S.R. has become increasingly impa- 
tient with the slow pace of domestic design and construction of 
modern-mobile offshore rigs and may purchase more foreign-built 
units. However, the unfavorable foreign trade balance in 1975 could 
reduce these kinds of purchases. 
Soviet plans for an increasing effort in offshore oil and gas develop- 
ment are a part of a major effort to increase oil production and 
to economize on fuel use. The fuel situation was named by Prime 
Minister Alexei N. Kosygin and the council of ministers as an item 
which would receive special attention in the next 5 Year Plan, which 
begins January 1, 1976.74 This shift in policy is the result of three 
developments: total oil production is not increasing as rapidly as 
planned; oil reserves, particularly in the Arctic regions, are proving 
technologically more difficult and expensive to exploit than expected; 
and both domestic and Comecon demand for oil is expanding faster 
than expected. Currently the Soviet Union produces more oil than 
it needs and exports about one-fourth of its output. Ten percent 
of total Soviet output goes to capitalist customers, but it also satisfies 
more than three-fourths of the oil needs of its Comecon allies. How- 
ever, by 1980 Soviet domestic requirements could match output at 
which time the U.S.S.R. would have to become an importer of oil 
should it wish to continue to supply its allies.” 
The Soviets insist Western forecasts that Russia may face energy 
problems in the early 1980’s are based on underestimates of future 
Soviet petroleum output. Dzandar Tackoev, deputy oil minister, in 
a recent Moscow interview suggested that Russia is raising production 
goals beyond those that Western experts have already judged to be 
overambitious. For the next 5 years, Mr. Tackoev projected an annual 
increase in petroleum output of at least 600,000 barrels per day. 
According to his figures, production by 1980 would reach 640 million 
tons per year, a figure well ahead of Western estimates and also 
higher than the 1980 target of 600 million tons per year indicated 
previously by Valentin Shashin, the Soviet oil minister. Mr. Tachoev 
said that his ministry was in contact with American oil companies 
that could sell the technology and equipment to help increase Russia’s 
oil output. The Soviet Union is also negotiating with several Western 
companies for the purchase of three plants to manufacture fixed plat- 
forms for offshore oil production, mobile drilling rigs, and subsea 
production equipment.” An influx of western technology would appear 
necessary to meet such ambitious production goals, but payments 
would have to be made from the Soviets limited hard currency supply. 
™ Soviets to Push Oil Production in Next Five-Year Plan. Journal of Commerce, June 12, 1975. 
™® Less Confident on Oil, Soviets Raise Prices and Spur Development. The Washington Star, March 
29, 1975. 
76 Ulman, Niel. Western Forecasts of Soviet Energy Crisis are Erroneous, Russian Oil Official Says. 
The Wall Street Journal, October 21,1975. 
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