Tyumen North: the history of development

Formation of oil and gas producing complex in the north of Tyumen region can be considered as an unexampled event of industrial development of vast northern territories characterized by extreme natural and climatic conditions.

Intensive development of oil and gas resources in Western Siberia urged the scientific community to develop new scientific branches and to assist in many remarkable discoveries. It also had an important impact upon the character of economic development in general by turning the country into “resource power”. It generated a great number of environmental, social and cultural problems, which had never been so critical as in the conditions of vulnerable northern nature and traditional way of life of old residents. Being a part of modern Russian history, the development of Tyumen north within the life cycle of one generation is not yet considered by the contemporaries as something epochal. It is rather considered as something close and ordinary. That’s way presently it is important to be attentive and sensible towards the history of industrial development which should become a basis for working out of criteria of rational and harmonious future of regional development.

The history of Siberian oil discovery started long before the oil became a symbol of the region. During hundreds of years a number of researcher presumed existence of petroleum in Western Siberia. This in XVIII century Croatian scientist Yuri Krizhanich exiled to Tobolsk wrote about presence of bituminous shale in the basin of the Ob River. Swedish captain Stralenberg, a member of D.G. Messershmidt expedition, wrote about combustible bitumen on the Irtysh River in the book “Northern and eastern part of Europe and Asia” published in 1730.

Academician Ivan Mikhailovich Gubkin, the founder of Soviet petroleum geology, played an important part in discovery of rich natural resources in Western Siberia. In 1932 he set up a working hypothesis on existence of oil fields in West Siberian plain. I.M. Gubkin was working hard on launching integrated geological studies in the region. However for another twenty years exploration activities have not given expected results.

The critical moment, beginning the history of Western Siberia as of an oil and gas province, took place in 1953. There was a strong blowout of gas on a rig situated not far from Berezovo, an ancient outpost of Siberia development by Russians. This event gave a start to a large-scale geological prospecting in the northern territories of Tyumen region. Regular geophysical and drilling operations on the territory of Khanty-Mansiysky autonomous district started in 1954. In 1958 a geological exploration expedition headed by V.D. Bovanenko was created in Salekhard. Its objective was to prove Academician Gubkin’s forecast on oil and gas veering capacity of Yamal.

Discovery of an oil and gas bearing deposit near Shaim settlement (district of present Urai) in 1959 producing more than one ton of oil per day became an important result of geological prospecting. Later such major oil and gas fields as Megionskoye, Ust-Balykskoye, Zapadno-Surgutskoye, Punginskoye and others were discovered. In 1962 a blowout of natural gas from a well drilled near Tazovsky settlement provided production rate of more than a million cubic meters of gas per day. Tazovskoye oil field became the first major gas field discovered in polar region.

In 1963 the Council of Ministers of the USSR adopted a resolution “On organisation and preparation for industrial development of discovered oil and gas fields and on further development of geological prospecting activities in Tyumen region”. Production testing of explored reserves was under preparation. By 1964 explored reserves were equal to about 300 million tons of oil and 176 billion cubic meters of gas in 8 oil fields and 2 gas fields. At the same time construction of trunk pipelines Igrim-Serov for gas and Shaim-Tyumen and Ust-Balyk-Omsk for oil was launched.

The year of 1965 became a milestone in the history of West Siberian oil and gas province development. In 1965 Samotlor oil field was discovered. It was the biggest oil field in the Soviet Union by explored reserves and one of the 10 major oil fields in the world. In the same year Berezovo group of gas fields was discovered. It produced from 500 thousand to 1,5 million cubic meters of day per day. Zapolyarnoye gas condensate field with its tremendous reserves was also discovered at the same time. One year later the list of discoveries was added with the world biggest Urengoy oil and gas condensate field. In 1967 – Nadymskoye and Medvezhye gas fields, in 1969 – a new world giant – Yamburg gas condensate field.

Within relatively short period of time a small merchant town of Tyumen became an administrative centre managing construction of the largest oil and gas producing complex in the country. Big production associations – Glavtyumenneftegas and Glavtyumenneftegazstroy – were established in Tyumen. In 1964 Tyumen Industrial Institute was founded in order to ensure training of highly qualified specialists for the oil and gas sector. Later the Institute was reorganised into Tyumen Oil and Gas University – one of the leading higher schools in the region. Industrial enterprises of Tyumen performed the orders for oil and gas fields construction and development. Thus in 1969 the first floating power plant “Severnoye siyaniye” was built on Tyumen Shipbuilding Plant.

In 1972 the construction of the biggest national oil pipeline Samotlor-Almetyevsk commenced. The length of the pipeline was about 1850 kilometres. Upon completion of construction the oil produced in Western Siberia was transported to the foreign countries through the network of Druzhba pipeline. At that time due to considerable growth of the world oil prices and “energy crisis” in West European counties, the Soviet Union started gaining the authority of a major world “resource power”. National economy of the Soviet Union more and more depended on the funds gained through the sales of energy resources.

One of the most urgent and complicated tasks was construction of unique oil and gas fields situated in difficult-to-access areas with low density of population, sometimes in uninhabited areas of taiga and tundra. The process of construction and facilities set up was connected not only with the problem to deliver and to mount technical equipment into northern areas with extreme climatic conditions, but also with the problem of laying pipelines and other engineering service lines. One of major difficulties was to provide working and living conditions for an important number of people involved into the process of industrial development. A solution of this problem was organisation of work on shift basis. Most often teams of specialists arrived to work on sites located in remote areas far from big towns (called “big land” in the north). The period of work was from several weeks to several months. Living conditions were of minimum comfort. The specialists lived in camps. However work organised on shift basis could not fully satisfy the demands of swiftly developing administrative and technological infrastructure of the oil and gas complex. Thus from mid 60’s intensive urbanisation of Tyumen north started. As a result within a short period of time a specific system of settling was established. The system consisted of towns and industrial communities. With the exception of rare examples when new centres of development were established in places of historical settlements (like Salekhard, Khanty-Mansiysk, Surgut and Berezovo founded in the XVI – XVII centuries), the majority of new towns and settlements were created from zero in immediate proximity to major oil and gas fields and industrial facilities. Due to this peculiar feature many towns and settlements are distance from each other for hundreds of kilometres. For many years aviation has been the only reliable way of communication between the towns.

In 1984 Soviet Union ranked the first in the world for natural gas production (587 billion cubic meters per year). By that time the construction of a gas pipeline Urengoy-Uzhgorod has been completed. An opening ceremony of transcontinental gas pipeline Western Siberia-Western Europe took place in France. The length of this pipeline exceeded 20 thousand kilometres. It was used for the export of Tyumen “blue fuel” to Germany, France, Italy, Holland, Belgium and other countries.

In 1964 oilmen’s settlements were founded in Urai and Surgut. One year later they received status of towns. The town of Nefteyugansk appeared on the map of the Soviet Union in 1967, Nizhnevartovsk and Nadym - in 1972. The latter became advanced posts of several major oil and gas fields development. In 1980 the town of Novy Urengoy was founded near Urengoy gas condensate field. Urengoy became a supporting base for development of other gas fields located mainly in transpolar districts of Yamal. In 1982 an industrial community was replaced by the town of Noyabrsk.

In early 1980’s dozens of towns and big settlements were founded in Tyumen north. Comfortable residential houses were under construction. Full social infrastructure was under development. The population of new towns was mixed. There were mainly young petroleum specialists and construction workers from different parts of the Soviet Union. Considerable part of the population consisted of specialists from other regions of the country where petroleum business had been already developed (Azerbaijan, Bashkiria, Ural and Volga regions and other). Among them there were many people coming from the Ukraine, Byelorussia and southern districts of Western Siberia. Most of those workers were attracted by fast promotion and high salaries offered by the oil and gas producing companies. The population of new towns and settlements of Tyumen north often identified themselves not as newcomers but as natives of this developing region. Such tendency can be considered as a specific indicator of regional industrial community formation. The main difference of “new development” of Tyumen north from earlier development of Ural and Siberia is application of design methods. Thanks to these methods initially an organisation matrix of production complex was set up, later it was filled with newcomers from different regions of the country. These people became the basis of new industrial region’s population.

Large-scale process of developing areas population contributed into further development and stimulation of production from rich deposits of natural resources. However due to a number of internal and external factors, in many respects this very period gave a start to the crisis of West Siberian oil and gas complex. From 1982 a number of production companies have not been following oil production programmes. Mostly it was due to depletion of reservoirs situated close to earth surface, quick obsolescence of material and technical basis and insufficient quality and quantity of research and practice methods. The latter could allow rational development of oil and gas fields. Landslide of world oil prices in the second half of the 80’s and the Perestroika crisis of the entire industry of the Soviet Union aggravated negative tendencies of oil and gas production and service industry development in Tyumen region.

By the end of the 1980’s, thanks to the possibility of open discussion of problems having been under ideological interdiction in the Soviet society, the discussions of a whole bunch of urgent social, cultural, economical and environmental problems began. The period when oil was produced under the old slogan “production at any price” using thoughtless and even barbarian methods was replaced by the period of public comprehension of urgent problems.

The first set of problems was connected with the necessity of oil and gas complex upgrade by implementation of advanced technologies to ensure enhanced oil and gas recovery.

The second set of problems was connected with the difficulties and contradictions in the social sphere of the settlements located near oil and gas fields, i.e. onrush growth of local population. Irrespective of all measures taken to provide comfortable living conditions, many families suffered from shortage of social settings and proper living conditions.

Intensive development of oil and gas fields originated colossal environmental problems. Numerous pipeline accidents, oil leakage and air pollution disturbed or destroyed flora and fauna on the vast territories. Dozens of rivers and lakes became dead due to thoughtless activities of oil and gas production companies. Thousands of kilometres of tundra soil was disturbed by the tracks of cross-country vehicles.

Environmental problem was closely connected with the problem of the aboriginal population of the north. Destruction of its traditional way of life based on harmonic interaction with environment, forced sending of children to boarding schools, communication with newcomer workers and builders of insufficient standard of culture stimulated fast degradation of aboriginal population and development of alcoholism.

In the end of the 1980’s the majority of these problems became subjects of intense discussions. In 1987 and 1988 the Department of applied ethics of Tyumen Industrial Institute (now Oil and Gas University) organised Samotlor Practical Conferences to unite public agents, researchers and active population. The objective of these conferences was to jointly develop scenarios of overcoming crisis tendencies in the social life of northern population.

Active representatives of aboriginal population of the north started working on saving traditional culture and methods of natural resources use.

In 1985 the Institute of North Development Issues, Siberian branch of USSR Academy of Science was created in Tyumen. In 1990 the Institute merged Tyumen Research Centre of Siberian branch of the Academy of Science. The Research Centre included the Institute of Earth Cryosphere, West Siberian branch of the Institute for Geology, Petroleum and Gas and a number of other scientific research units. The objective of Tyumen Research Centre was to carry out fundamental and applied studies aimed at solution of urgent problems of oil and gas province development. Unfortunately, unstable social and economical situation following by reduction of research financing in the early 90’s did not allow full realisation of a large academic centre in Tyumen able to work on solutions to specific regional problems.

At that time people were leaving northern towns. Lack of stability and uncertain perspectives suddenly made people feel themselves hostages of the process of industrial development, though not a long time ago they were direct participants of the process.

Irrespective of the crisis tendencies in the second half of the 90’s social and economic situation in Tyumen north changed for the better. Soon Tyumen region became one of the most stable regions of post-Soviet Russia.

Further peculiarities of social and economic development of Tyumen north were determined by Federative Agreement signed in 1992. According to this Agreement Khanty-Mansiysky and Yamalo-Nenetsky autonomous districts became plenipotentiary subjects of the Russian Federation. Autonomous districts had their own local authorities and a budget. The results of such administrative and territorial split had ambiguous consequences. On the one hand, they stimulated further active development of new areas, new public initiatives in production and social spheres. On the other hand, the changes aggravated the problems connected with political and economic decomposition of the region, which has possessed common administrative and production complex. Thus by the beginning of the 90’s Tyumen region could be considered as a self-sufficient region: its districts were mutually complimentary in social and economic respects. Tyumen played an important part in the history of West Siberian oil and gas province development. It was an important transportation centre, education and research centre and a production centre. Agricultural districts of the south of Tyumen region had a significant potential for food supply of the northern territories. The south also supplied human resources needed for permanent employment and work on shift basis in the oil and gas production companies.

Divergence of corporate interests of political and economical elites of three administrative subjects of Tyumen region in the second half of the 90’s put obstacles in the way of efficient realisation of administrative and economic co-operation practiced in the 1960’s-1980’s. Though some time later co-operation programmes between Tyumen and autonomous districts were developed in order to offer solutions to urgent economical and social problems.

One more peculiar feature of post-Soviet Tyumen north was active participation of private oil and gas producing companies in its development.

In 1989 the Ministry of Gas Industry of the USSR was reorganized into a state gas concern GAZPROM. In 1992 it became a joint stock company. Presently JSC Gazprom is the world biggest gas company. It carries out geological studies, production, transportation, storage, processing and sales of gas. The state holds the control of the Company.

In the 1990’s a number of major private oil companies appeared including Surgutneftegas, LUKoil, Slavneft, YUKOS, Sibneft, Tyumen Oil Company and others. They work on the territory of Tyumen north.

Social and environmental issues rose in late 1980’s – early 1990’s had a response only in administrative and legislative domains. Environmental monitoring authorities were created on the territory of Khanty-Mansiysky and Yamalo-Nenetsky districts. Apart from monitoring activities the authorities control permissible pollution norms. A number of laws protecting the rights of local aboriginals were adopted to allow traditional activities in ancestral estates and other protected territories

The border of the ХХ and the XXI centuries was remarkable in realization of big social projects in Tyumen north. It proved that Tyumen region should not be considered only as resource periphery, but also as a region with active post-industrial development. Thus within a short period of time several large-scale investment projects in the domain of social development were realised in Khanty-Mansiysk. The source of investment was income from oil and gas industry. One of the world best biathlon centres was constructed in the town with population of about 50 thousand inhabitants. Other projects included international class hotels, Yugorsk University and Institute of Information Technologies, cultural institutions with high standard equipment considered as one of the best in Russia. Some international cinema festivals and other major events were organized in Khanty-Mansiysk to increase tourist attraction and develop tourism in general.

Perspectives of such undertakings gave rise to ambiguous evaluations. On the one hand high economic possibilities of oil and gas production regions make possible realisation of different important projects aimed at improvement of quality of life and formation of new non-industrial branches, for instance, information technologies, paid education and research services or tourism. Though one should not forget that some factors considerably limit further development of these domains as leading branches of northern territories economy, at least in the immediate future. Development of post-industrial sector of economy implies formation of the community of so-called knowledge-class consisting of highly qualified specialists in various high technology domains. Presently this gap is filled by means of invitation of specialists from other regions or from foreign companies to dynamically developing cities like Khanty-Mansiysk or Surgut. Though this approach cannot solve the problem of sustainable proper research and technology communities and schools with high innovation potential. Natural process of such communities and schools development usually takes long time.

Speaking of the problems of tourism development it should be mentioned that the tours to the north of Tyumen region are expensive due to lack of transportation means and big distance from Central Russia. The only reliable means of access to Khanty-Mansiysk and Salekhard is air transport.

Refineries, gas processing plants and woodworking enterprises are considered perspective for economic development of Tyumen north. The drawback of processing branch development is high cost of plants and factories construction in severe northern conditions. This shall influence competitive abilities of products compared to production of southern territories with high density of population.

Undoubtedly in foreseeable future the territory of Tyumen north shall remain the richest storeroom of the national energy resources.

Total area of Khanty-Mansiysky autonomous district makes 534,8 thousand square kilometres. The population is about 1 480 thousand inhabitants. Total oil production of Khanty-Mansiysky autonomous district (Yugra) is 57% of total Russian oil production and 7,2% of total world oil production. The district keeps the second place by the amount of taxes paid to the federal budget.

The area of Yamalo-Nenetsky autonomous district is 750,3 thousand square kilometres, the population slightly exceeds 515 thousand inhabitants, i.e. the density of population is 0,7 persons per 1 square kilometre. Even so the district keeps the third place by the amount of taxes paid to the federal budget.

Yamal produces about 90% of natural gas in Russia (almost a quarter of world production) and about 15% of Russian oil and gas condensate. Totally it produces about a half of primary energy resources of Russia. Enormous share of natural resources of Yamal still waits for industrial development.

One of the global long-term projects is development of gas resources of the peninsula and Kara Sea offshore. 11 gas fields and 15 oil and gas condensate fields are discovered here. Potential reserves taking into account offshore gas are estimated at more than 50 billion cubic meters; liquid hydrocarbons – more than 5 billion tons.

Another big initiative is creation of a new centre of metal mining industry in Polar Ural. This centre is expected to provide neighbouring regions with raw materials. Presently rich deposits of chromium, manganese, bauxites and gold are under development.

Besides minerals Tyumen north possesses one more unique treasure. It is a vast territory of traditional northern activities. Their further preservation and development may play an important cultural and economic role for the region. Purposeful state support can help them become a key factor of preservation of traditional culture of northern aboriginals and also assist in development of specific northern agriculture and trade. Thus on the territory of Yamalo-Nenetsky autonomous district there is the world biggest livestock of reindeer – about 600 thousand heads. One third of white fish world reserves are caught in the basin of the Ob River. One tenth of the district’s area – about 8 million hectares – is occupied by a specially protected natural zone. Natural resources of Khanty-Mansiysky autonomous okrug located in taiga are unique in many respects. Following reasonable principles of natural resources use providing stable reproduction of existing ecosystems, Tyumen north may become a leader of valuable fish supply and dietetic venison supply.

The most branched system of settling is developed in the area of Middle Ob. Within a short period of time such cities as Surgut and Nizhnevartovsk are built there. From the end of the 1960’s meridional transportation line was built linking Tyumen and big towns of the north. The line included a railway and a highway. At present this line functions in the direction of Tyumen – Tobolsk – Surgut – Novy Urengoy. There is a minor railway from Novy Urengoy to Yamburg for transportation of cargo and working brigades to a large polar gas field. The town of Labytnangy is a terminal of a railway passing through Vorkuta in the direction of Moscow. A railway from Ekaterinburg to Priobye settlement passes through Nyagan and other settlements situated in the west of Khanty-Mansiysky autonomous district. In general, talking of the problems of transportation network development in Tyumen north it should be noted that there’s lack of latitudinal lines linking bigger towns and providing access to important transit lines. Active measures to improve the situation are taken in Khanty-Mansiysky autonomous district. The district takes part in construction of Northern Transportation Corridor, which could link it with highways passing through northern areas of neighbouring Sverdlovsk and Tomsk regions. By now construction of network linking eastern and western territories of Yugra is under completion.