After the discovery of the oil fields, Baku became a special place, where various economic and political interests of international coalitions, industrial clans and leaders were concentrated and clashed. VK begins publishing chapters from the book by Ismail Agakishiev "History of the Baku Oil Industry and the Second Oil Boom (second half of the 19th century - beginning of the 20thcentury.)". The book presents a historical analysis of the emergence and current state of the Azerbaijani oil industry.
In 1888 this partnership rated fourth in Russia by level of oil extraction. Its wells yielded 54,000 tons of oil, while its factories produced 36,000 tons of kerosene and lubricants. By 1899 the total oil extraction of the partnership reached 183,000 tons, which reached the market in the form of 30 different products.
The Shibaev company had a ramified network. Its headquarters were in Moscow, with regional offices in thirty-five Russian cities. The Baku branch employed 275 people. Later, however, as a result of family conflicts, the company of Shibaev fell apart. In 1899 some parts of it were sold to the house of Rothschild, while the remaining part was later bought by British entrepreneurs.
Although Russian industrialists had a prominent place in the oil sector, they were far behind the Swedish Nobel brothers. The Nobel company was founded in 1873, when Ludwig Nobel sent his brother Robert to the Caucasus to buy some precious wood for the production of rifle butts. At that time the Nobel brothers were known as producers of weapons. Introduced to the oil business in Baku, the brothers decided to invest 27,000 rubles to buy a small oil refinery and several oilfields. Already in 1875 the “Nobel Brothers Partnership” began to produce high-quality oil. From that time on, the partnership became the true leader of the Baku oil business.
In Russian academic and semi-academic texts the Nobel brothers often appear as representatives of foreign capital. One can disagree with that. Swedish historian Britta Osbrink noted that “Ludwig was sometimes reproached for being a foreign monopolist”. There was some truth in this. However, Osbrink stresses, money for investment was coming from other Russian enterprises, from Ludwig’s machine-production plant and the Russian military industry.
The foreign descent of a significant number of Russian industrialists, including the Nobel brothers, did not mean the dependence of Russian industry on foreign capital. The nationality of the capital is defined by its origin and the investment of revenue. The sources of the Nobel's capital were in Russia, and its revenue was mostly invested in expanding its production in Russia too. Therefore it was entirely Russian capital.
The opinions of certain authors in this regard look surprising. These authors choose arguments to deconstruct the Soviet historiographical interpretation of the 1960s and 1970s, that the capital of the industrialists of foreign descent should not necessarily be considered foreign. Thus, N.A. Maltseva, V.I. Igrevsky and Y.V. Vodetsky write that “although the Nobel prize in the sphere of the oil industry was established in 1901 specifically for Russian scientists, it was never awarded.” That does not sound like a convincing argument.
The last quarter of the 19th century saw a drastic increase in demand for oil products in Russia. Until the 1880s Baku oil was mostly used for illumination or as a lubricant. Later on, the sphere of application expanded. Transport became an important consumer of oil. Gradually, all means of transport switched to oil fuel. The development of the railways contributed to oil consumption. Government decisions to use oil fuel on the state railways and to ban foreign coal increased oil demand. By 1900, oil comprised 70 percent of all fuel used by the Russian river fleet.
The Azeri scholar C. Sultanov wrote that the early 20th century oil industry had an explicitly “mazut character”. In analogy, it can be said that the late 19th century oil industry had a “kerosene character”.
The Nobels' company played a special role in raising the capacity of oil extraction and increasing the production of petroleum. Ludwig Nobel proved to be a true innovator in this period. In one of his first visits to Baku, he wrote about his impressions: "This land is absolutely anhydrous, and where there is water, it is bitter, salty and soaked with oil. There is no forest at all, the land is wild, the people are uneducated and poor, there is no fuel except for the oil, and the climate is extremely unpleasant. Summer heat and winter winds are typical here."(2) In 1876, L. Nobel wrote an analytical note
"View on the Baku Oil Industry and its Future", in which he put forward a number of proposals for improving the oil business in the province. The main proposals were: 1) the refusal to transport oil by animal transport and construction of pipelines from the fields to the oil distilleries; 2) the construction of railway tanks for storing crude oil and petroleum products, wider use of oil residues (fuel oil) for heating and gas production; 3) the introduction of bulk transport of oil in tanks, river and sea ships; 4) the creation of a branched structure for the storage and sales of petroleum products in Russia.
Nobel himself implemented these suggestions. He was constantly concerned with improving technology in the Baku oil fields. In 1886, he wrote a new note: "Suggestions on the organization of management in Balakhani ". Over the years, oil pumped from the wells was stored in a variety of pits, trenches and other excavated reservoirs in the earth, sometimes of enormous size. The result of this mismanagement was the loss of significant amounts of oil because of evaporation and seepage into the ground. Groundwater in the vicinity of these wells prompted contamination of both the water and oil. Nobel introduced "his revolutionary invention" - the iron reservoirs, which stopped the loss of oil and significantly reduced pollution of groundwater.
Continuous distillation of crude oil was established in the enterprises of the "Nobel Brothers Partnership" in the summer of 1882, and Ludwig Nobel received a patent for this. It allowed the production of kerosene in the enterprises of the Nobel Company to be increased. It is worth mentioning that the
continuous distillation of crude oil in the United States began only in 1906. In 1883, 186 thousand tons of kerosene was produced - more than all the competitors of Baku put together. Special nozzles, invented by engineers in the "Produce" enterprise of the "Nobel Brothers Partnership" allowed for black oil to be efficiently processed both in the workplace and in everyday life. Before 1870, the black oil that remained after the distillation of kerosene and other products out of crude oil had been considered waste and burned. This can be explained by the primitive technology of production, which didn't demand too much effort - the fountain method. With the invention of nozzles an opportunity emerged to use black oil as fuel. Prior to this historic event the low recovery rate of fuel oil in Russia was considered normal. The nozzle, called the "Nobel Burner," was used for heating houses, bakeries and cooking stoves (in this business the Nobels were three years ahead of the American businessman Rockefeller). In 1878 at the Nobels' enterprise, a large fuel oil cooler, nicknamed "Ivan the Great", was assembled in a tank of 20 thousand pounds capacity. From 1887, at oil factories of Nobel brothers, there began the installment of steam pumps for transfering oil and black oil into pressure vessels, and the cooling of burning black oil was also introduced. In accordance with Ludwig's program, the first oil pipelines were created.
In the short term the Nobels became the wealthiest oil-industrialists in the region and the country. According to historians who have investigated the Nobels' activities in Russia, the brothers actively engaged in formation of the infrastructure. Near the "Nobel towns", they built comfortable houses for married workers and hostels for singles, as well as elementary schools, canteens, bakeries, hospitals, pharmacies and even sports facilities. Most of the buildings accomplished by the Partnership are preserved nowadays.
The majestic orthodox Alexander Nevsky Cathedral was erected with the Nobels' funding in Baku. It was blown up by the Bolsheviks in the 1930s. The Roman Catholic Cathedral of the Blessed Virgin Mary and the Evangelical Lutheran Church were also built. The Partnership permanently allocated money for maintaining the Bibi-Eibat holy tomb in the village of Shikhovo. The partnership had a "special fund" for issuing both lump-sum benefits and pensions for sickness and old age. In addition, there was a savings bank for all workers and employees. Concerned about the sustainability of the enterprise, the Nobels opened a seismic station in Baku that very day, registering shifts of the earth's crust. Without exaggeration, the activity of the Nobels was a shining example.
