Oval Useful news from Azerbaijan and Caucasus
The first congress of the Baku petro industrialists has been founded in 1884 in Baku; further these congresses continued to function up to revolutionary events of 1917. The importance of congresses was defined by that the largest petro industrialists of the Russian empire took part in them, including and
«Russian Rockefeller» Ludwig Nobel (heading Council of congresses up to 1888), Rothschild’s brothers and many other industrialists defining the person of oil business of Russia.
Beginning already from II congress representatives of firm «Nobel brothers» regularly were present at “oil” congresses, and Emmanuel Nobel (Ludwig’s son who has headed firm after death of the father in 1888) constantly took active part in them. The Russian government also participated in oil congresses and every time sent on them the representatives in the name of the Minister state properties, either the Minister of Economics, or the Minister of Railways.
Congresses served for the organization and coordination of activity of the Russian businessmen, and a main objective of congresses was «possibility of petro industrialists to express before the government the needs, aspirations and desires». However, congresses were necessary not only to petro industrialists, but also the government: it was much more convenient to government to supervise over leaders of the oil companies and the representatives of the oil business who has gathered in one place and in at one time.
In a case of the American government the following there was observed: it without supervising the businessmen, tried to help in every possible way to them since understood the importance of activity of petro industrialists as a whole. In his memoirs John Rockefeller marked:
«Each time having become successful, we earned money for fatherland, and the failure was the loss for our nation and its labor people. We had the best support from the government of our country. In business of opening of ways to world back streets; we were helped by our envoys, ministers and consuls» [Memoirs of American billionaire D.D. Rockefeller. Publishing house “Columbus”, St.-Pb., 1909, p.98].
It is necessary to notice that congresses were favourable not only to large businessmen, but also the overwhelming majority of the small companies and private petro getters: uniting round the decision of this or that question, they could influence the more successful contenders. Another matter – large petro industrialists (Nobels, Rothschilds, etc.) using a congress tribune in their purposes. I.e. large firms, as a
«Nobel brothers», Rothschild’s «the Caspian-Black Sea society», «the Baku oil society», used a tribune of congresses, along with and an other ways at the decision of arising problems. The basic argument of large firms in public disputes with the opponents was not public, but there were secret actions: accurately adjusted relations with the central power were used. For example, firm of «Nobel brothers» to a risky and unpopular way with attraction of the western capitals for receipt of effective result, preferred the way consisting in verified methods, co-ordinated and approved by the government.
On the other hand, the congresses uniting both large, and average petro industrialists, promoted the decision (coordination) of collective sights at this or that problem. It, to a certain extent equalised petro industrialists of “any prosperity» and guaranteed them certain indulgences and privileges. Here we will notice that in almost annually spent congresses took part and more than 150 small manufacturers (companies) who also tried to use oil congresses in own interests.
Investigating materials of congresses we notice that a red thread through them passed a collective voice of the Russian (Baku) petro industrialists anxious by advancement on the West of native oil products. Already at I-st congress under №12 it was such theme «About the optimal conditions of export of kerosene and lubricant oils abroad, reduction in price of freights, goods storage on sale places, the organization of agencies for reception and holiday to buyers, etc.» [Works of I Congress of petro industrialists in Baku from October, 26th till November, 8th 1884, Baku, V. Neruchev’s Printing house, 1885, pp.4-5].
And at VI congress the question «About consequences for our kerosene export from the permission of the admission of tankers through Suez canal» was considered. [Works of VI Congress of petro industrialists in Baku from January, 15-17, 1890, Baku, Printing house of newspaper “Caspian”, 1890, p.1].
The problem «Development of sale of our kerosene in general, and bulk in particular, in the markets of the Far East» was discussed and at XI-th congress [Works of XI regular Congress of petro industrialists in Baku from April, 21st till May, 2nd 1897, Baku, “Aror” Printing house, 1897, pp.84-91].
Council of congress of the Baku petro industrialists had the office and office, and also the bank account growing as at the expense of payments as a tax for pood from extracted oil, and at the expense of industrial activity. At Council of congresses the Special statistical bureau into which duties entered collection of information, processing and promulgation of all data concerning oil business worked. From the moment of establishment (1884) congress Council will organize a network of specialized technical libraries for employees of a petroleum industry; the first in this network had been organized library for employees of the Council. To 1911 in this library were more than 10 thousand books in Russian, English and German languages, basically, on technical disciplines.
Since January, 10th 1899 Congress council has started to publish in Baku once in two weeks the newspaper «Oil business»; from 1908 is already magazine which is published and to this day (since May, 1920 it is renamed into «the Azerbaijan oil industry/economy»). Congress council published as well
«Reviews of the Baku petroleum industry»; both these editions were an invaluable statistical database for researchers and historians on oil business.
For the decision of one of the major problems of that period, namely, for fast introduction of the Russian kerosene to Europe known petro industrialist Victor Ragozin (1833-1901) at I-st congress advised the following:
«To address to Russian railways of northern direction that they have lowered the tariff for the foreign message and that you, at this position have found possible accordingly to ennoble the internal tariff. This is first offer. The second offer consists in that the tariff for bulk cargo has been compared to the tariff for the tare goods. If Russia takes in head to take advantage of fall of freights and to set to many kerosene to Europe she will meet a lack of the American barrels and will require in own. In interests of this position we need to petition for that tariffs of the Transcaucasia’s railway have been compared for the tare and bulk goods» [Works of I-st Congress of petro industrialists in Baku from October, 26th till November, 8th 1884, Baku, V. Neruchev’s Printing house, 1885, pp.33-35].
And at VI emergency oil congress contemplating a problem of building of the kerosene pipeline, V.I. Ragozin has shown that,
«It is necessary to recognize as the best position only such at which will transport everything that we show, and it is achievable only at sweeping changes in ways of transportation. That is why I also consider this question closely connected with a question on the tariff and about kerosene pipeline. For my party, I would ask to give some days on reflection and to cable the Minister of state properties about inclusion in the program of congress of a question about kerosene pipeline, as the most insistent now without which we are threatened with an utter ruin even at the most insignificant falling of the prices for kerosene in the foreign markets» [Works of VI emergency congress of petro industrialists in Baku, on January, 15-17th 1890, Baku, Printing house of the newspaper “Caspian”, 1890, p.5].
Here it is necessary to underline the Baku period of Ragozin’s activity – from 1883 to 1892. So, at the First congress of Russia’s oilmen (petro industrialists), taken place on October, 26th of 1884 in Baku, Ragozin told about of necessity of the organization from outside the government the geological investigation of oilfields. Next session of congress (on October, 27th) in the report “About the optimal conditions of export of kerosene and lubricant oils abroad” he has shown the extensive program of development of export of the Russian (Baku) oil products in which the basic question was a prohibition of export of raw materials and half-baked materials from Russia. In 1884, because of establishment of company “Association of S.M. Shibayev and Co” Ragozin has been appointed a manager of Baku branch of the company. Shortly thanks to serious organizational and technical transformations “Association” became one of the leading Russian companies in the field of production of lubricating oils. At the First All-Russia exhibition of subjects of illumination and heating (1888) Ragozin had been presented as exhibits the big collection of the processing of the Baku oils’ products. After an exhibition he has been awarded by the Diploma for “introduction for the first time oil refining on the lubricating oils, extremely useful works on installation in Russia their production and on distribution of these oils in Russia and abroad”. In 1889, on the World’s exhibition in Paris the mineral oils of Shibayev’s company (under Ragozin’s management) have received a gold medal and the oilfield’s equipment of the company has been noted by a bronze medal. Ragozin took place the most active part in work of first seven congresses of the Baku oilmen. At last congress (Baku; 29.10.1890) in which work he has taken part, he reported on “About some improvements in the conditions of our foreign export of oil products”. The main purpose of this report was the idea that only excellent quality of the Baku oil products will provide success in competitive struggle abroad with production of the American manufacture. At session of Baku Branch of Imperial Russian Technical Society (BB IRTS) in 04.05.1891 he has given the report of “Technique of processing of oil in connection with oil crisis” in which for the first time he has shown the principles of new technology of processing of oil distillates with use of gasoline’s vapors. In 1892, Victor Ivanovich has finished work in Shibayev’s company and has for ever left Baku.
The problem of the prompt building of the pipeline (kerosene pipeline) has sounded and at XVII congress of petro industrialists (from December, 8th 1901 till January, 9th 1902) at theme’s discussion
«To a question on what measures could promote distribution of oil products for replacement of foreign coal». Here pertinently to remind that extent of the greatest in the world kerosene pipeline Baku-Batum (1897-1907) has made 829 versts and the basic author of the project of this main pipeline belonging to the Transcaucasia’s railway was the professor of the S.-Petersburg institute of technology N.L. Schukin. Further the pipeline of Baku-Batum has rendered the invaluable help of Russia (later, the USSR) in a successful competition to the American petroleum industry.
As it is known, in Russia by the end 70 – to the beginning of 80th years native (Baku) kerosene already prevailed; here an important role has played the active business activity of “Nobel Brothers” company on Absheron peninsula. It’s very interested the thesis of the historian Irina Dyakonova asserting that «… the crisis which was outlined in 1877, in certain degree spoke that collection of state duties from import kerosene has been translated from autumn of this year on gold calculation that has given to the customs duties on the American kerosene semi prohibitive character» [Dyakonova I.A. Nobel corporation in Russia. М: Mysl, 1980, pp.63-64].
I.e., during this period there was a change of monopolies: on a place of foreign (American) became the Russian monopoly in person of Nobels and Rothschilds. Later, in 1914 according to the data of Council of congress of the Baku petro industrialists (XXXIII congress), a share of three monopolistically groups («Nobel brothers», “Oil” and “Shell”) was made up 69,5 % of export of oil products from Baku. It was pertained to the specified groups more than 60 % of the oil extracted in the Russian empire, 2/3 of production of kerosene and black oil (mazut), and also all profit on sale of lubricant oils.
The detailed analysis of works of oil congresses gives the basis to consider that on them was discussed not only a state of affairs in practice, but also a condition of hardly arising applied science about oil. At congresses with their views on oil production known scientists and industrialists repeatedly acted: Mendeleyev D.I., Lisenko K.I., Ragozin V. I, Tagiev H.Z., Naghiyev Musa, Asadullayev Shamsi, etc.
For example, Dmitry Mendeleyev presented at I congress was happy with depth of questions and the problems considered at congress. The scientist has underlined that «… free unity of figures in one industry for discussion of their interests makes large and desirable news not only to Baku, but also to all of us… Open consideration of questions and affairs of the free industry should be welcomed».
At the same congress Victor Ragozin has noted the following on question about of necessity of oil prospecting and development of applied science for needs of a petroleum industry:
«I will dare to notice that we conduct this industry in the most barbarous image: we overtake today that oil which have extracted from wells at night. It isn’t the industry. We are put in such position that we do not know – whether oil will suffice for the next day us. The petro industry has no organisation. In my opinion, misters, the imperative need in that before to be engaged in a rising of this scientific and technical knowledge which advantage, of course, cannot be denied is necessary, it is necessary to define: what we own. I do not wish to tell that this problem is easy; that as soon as we will wish to address to the government for assistance so the veil will fall also all deep sacraments terrestrial will open before us; but we should remember, misters that without the scientific grant, without persistence, without energy this knowledge from the sky to us will not fall down. We should do attempt to lift this veil, to reach secrets, and if not to resolve a question on that: whether oil is developed continuously as assumes D.I. Mendeleyev, or it represents a stock put in ancient times; whether there was it by internal organic decomposition (this question less interesting though I will not tell that it was not so interesting) – then scientific research will shed at least some light to us where to drill and how to drill, will specify a probability limit – on what and where we can count, whether we can be considered as rich men or should consider itself as beggars » [Works of I congress of petro industrialists in Baku from October, 26th till November, 8th 1884, Baku, V. Neruchev’s Printing house, 1885, p.4-5].
The reasonably interesting fact: already at I congress (1884) the Baku petro industrialists have put forward idea «to catch up and overtake America». The basic words sounding at congress were: «we promise to fill in with kerosene all Europe», «to be compared to the American kerosene», «our rights to a competition to America» etc. It was not empty bragging. Later, in his memoirs John Rockefeller gave due to the Baku industrialists:
«Everywhere stories are extended that the company destroys the competitors. But only the people badly informed in its affairs, can give belief to such hearings. It has, had and will always have one hundred gifted competitors. The company only therefore has achieved strong position that has managed to run the businesses so well, economically and honesty. And one more word about a competition: it is necessary to think that not only in business of clearing of kerosene, but also in other industries there is a cash of hundreds and thousand gifted competitors. And there is more value behind a competition out of limits of America. Company’s kerosene constantly struggles with the Russian kerosene, menacing to grasp the European markets» [Memoirs of American billionaire D.D. Rockefeller. Publishing house “Columbus”, St.-Pb., 1909, p.97].
Let’s remind that in 1899-1901 by absolute quantity of the extracted oil the Baku petroleum industry won first place in the world, having given 11,5 million tons a year; America on the second place – 9,1 million tons.
Further, at XVI congress, considering serious charges to oil firms-exporters from outside small petro industrialists, it has been noticed that a principal cause of sharp falling of the prices for kerosene was the same, as in America – a problem of an uncontrollable oil recovery. About it was openly told at this congress:
«The fountain of the Baku oil society which has begun the activity since November really forces to think of how to arrive at such emergency phenomena, as a large fountain. On sites of such small area, moreover in connection with a high rent, the industrialist should organise all trade economy and put probably more wells; that on these sites of places, more or less free, is not enough for oil storages has as a result turned out; if still it is possible to find on them a place for bailing oil, anyway, for gushing oil on its one site is not available. Everyone knows that any oilfield is not equipped so that to pump out any quantity of oil, therefore and during a fountain of the Baku oil society which were throwing out in the beginning more of 1 million of poods a day, within the first days there was no possibility to clean all oil; when this oil has filled all barns of the next oilfields of “Nobel Brothers Co.”, even means to swapping of this last oilfield it has appeared insufficiently… It’s well- known to all, that despite substantial growth by the Baku oil society of means to oil swapping in barges, already on 3-4 put shaft of the barns brought by enormous quantity of sand, have broken, oil has overflowed then barns of “Nobel Brothers Co.” and a natural way has started to extend on other oilfield… The technical commission is forced to recommend to the Baku oil society besides emergency spilling of oil an emergency measure; this measure consists in oil descent in old drilling wells» [Works of XVI next congress of petro industrialists in Baku since December, 8th 1901 on January, 6th 1902, volume I, Baku. Printing house of 1 typographical association, 1902, pp.290-291].
In conclusion of imposition it would be desirable to notice once again that participants of oil congresses were known petro factory owners and public figures (Nobels, Rothschilds, H.Z. Taghiyev, V.I. Ragozin, Musa Naghiyev, Shamsi Asadullayev, V.I. Timiryazev, D.P. Konovalov, V.A. Bashkirov, N.A. Sokolovsky, B.A. Ogulevich, A.M. Feigl, K.V. Hagelin, I.G. Garsoyev, I.N. Pershin, M.B. Pappe, E.S. Levenson, etc.), and also large scientists-researchers of oil (D.I. Mendeleyev, K.I. Lisenko, K.V. Harichkov,
I.N. Glushkov, A.A. Bulgakov, S.K. Kvitko, K.O. Engler, I.I. Yelin, R.A. Vishin, L.G. Gurvich, M.M. Tikhvinsky,
V.I. Frolov etc.). It finally has led to that the Baku oil congresses became generators of many ideas in the field of oil production and have played the important role (similarly BB IRTS) in technical education of petro industrialists in Baku, and in the Russian empire as a whole.
In detail studying materials of congresses you can find a quantity of interesting ideas and offers on oil business which were roughly discussed at congresses, namely: about correct exploitation of oilfields; about the means promoting a raising of the scientific and technical party of the Caucasian petroleum industry; about the prevention of fountains and leading in of the best way of storage of crude oil; about the optimal conditions of export of kerosene and lubricant oils abroad, etc.
Materials of congress of Council of the Baku petro industrialists accurately showed, who the true oil leader was. Each respectable oil firm had certain quantity of voices in Council. The vote was defined by capacity of firm and volumes of its manufacture. According to the Council charter, the right of the first voice was given «by extraction from 100 to 500 thousand poods of oil a year, production from 100 to 200 thousand poods of lighting and lubricant oils and swapping from 1 to 2 million poods». To receive the second and each subsequent voice, it was necessary to have extraction in 2 million poods of oil, production in 800 thousand poods and swapping in 8 million poods a year accordingly. For example, at XXXII congress of Council of the Baku petro industrialists the firm «Shamsi Asadullayev» has typed 10 voices and has entered into first ten oil companies of Baku («Nobel Brothers» Co. – 24 voices). Oil production on Asadullayev’s oilfields reached 8 million poods a year.
By recognition of many foreign experts studying history of oil business, on the sample and similarity of editions of Council of congresses («Oil business» and «Reviews of the Baku petroleum industry») later on, were composed the principles of preparation and processing of oil statistics in many countries of the world.
In 1920, after an establishment of the Soviet power in Azerbaijan, Council of congresses has been liquidated.
Author: Miryusif Mirbabayev
Source: Concise history of Azerbaijani oil
