Baku Had Its Origins as a ‘Nobel’ Venture

The Nobel brothers, Robert, Ludvig and Alfred – the latter is the inventor of dynamite and the father of the Nobel Prizes – were Swedish inventors, engineers and investors who operated mostly in Russia, where they filled a technological void from about 1860 until 1900.

Specifically, they had a machine factory in St. Petersburg and were producing oil in Baku, Azerbaijan – and the combination helped them to make a fortune.

In the Beginning

The oil in Baku started flowing in 1875, and in 1879 the brothers founded their oil company, Branobel, with the main activities in Baku – where any farmer who put his spade in the right place could become an oil baron.

The full name of the company was Petroleum Production Company Nobel Brothers Limited. The original Russian name, ratified by the tsar, was “Tovaristjestvo Neftjanovo Troizvodstva Bretjev Nobel.” The headquarters was in St. Petersburg.

The brothers expanded the operation – from the oil well and refinery to distribution with pipelines and tankers – and they set up petroleum storage sites around Russia and the rest of Europe.

The brothers also learned a lot from the United States, where the technology was way ahead of Russia. They often sent engineers to Pennsylvania to collect as much information as possible.

It was a breakthrough for the European energy market when the Russian steamer “Sviet” arrived in London in 1885, fully loaded with oil.

The brothers also invented new technology. A powerful engine for drilling and extracting oil was needed, and the brothers modified the steam engine and steam boiler to be adapted to use oil.

The distillation of the crude oil left a worthless residue, called masut. Ludvig Nobel then designed a new oil burner – and masut, with its high fuel value, came to be used in industry, steamships and railway operations.

Its economic importance for Russia’s industrialization was enormous.

A Growing Influence

In 1888 Ludvig died in Cannes on the French Riviera.

After his death, his sons Emanuel and Carl took over. Emanuel managed Branobel and Carl managed the machine factory in St. Petersburg.

One of Carl’s great achievements was to build an internal combustion engine that could run on oil – not on paraffin, as was previously the case. The factory displayed their new invention at the world exhibition in Chicago in 1893.

After Carl died in 1884, his younger brothers, Gösta and Emil, ran the machine factory.

In the autumn of 1888, Tsar Alexander III and Maria Fjordorovna, their family and ministers visited the Nobels in Baku. The tsar, who otherwise was always surrounded by both visible and invisible police, went around Nobel’s factories without a single policeman.

(On the return journey, however, the tsar’s procession was attacked by dissatisfied workers and about 20 travelers were killed.)

Emanuel acted on Tsar Alexander III’s invitation to become a Russian citizen – the only one in the Nobel family – and he later received the title of “His Excellency.” Emanuel remained unmarried and he became increasingly like a Russian prince, with a weakness for grand dinners and jewelry.

The greater part of Baku’s pipeline system was, by the turn of the century, owned by Branobel. Almost 60 percent of the oil transported on the Volga came from the Nobels’ factories. Branobel’s fleet was greatly expanded; boats and barges were adapted for the rivers and canal systems:

  • On the Black Sea, boats went from Batum, Novorossisk and Rostov to Russian harbors.
  • Via the Caspian Sea, oil was carried into Russia and on to Europe.
  • Oil was transported to Vladivostok and China, as far as Shanghai, by train and camel.

In the strong competition between the European oil companies, the Nobel brothers had a great advantage, and by 1916 Branobel had a dividend of 40 percent and was producing a third of Russia's crude oil, 40 percent of the refined oil and supplying two thirds of domestic consumption.

Comes the Revolution

Then, in February 1917, the Russian Revolution began, and the tsar abdicated his throne. In June 1918, the new Soviet regime nationalized all privately owned industry.

The Nobels were wanted capitalists, and as Emanuel was a Russian citizen he was forced to flee with his family. The Nobels traveled – disguised as peasants – by horse and cart for several weeks, helped along the way by their companies’ sales agents.

On Nov. 26, 1918, they reached Berlin. Back in Sweden, Emanuel renounced his Russian citizenship. He died in 1932.

The younger brothers, Gösta and Emil, stayed on, trying to save Nobel’s assets in St. Petersburg. Gösta attended a meeting in Moscow with the new Soviet central oil committee. The Bolsheviks’ intentions were to write a constitution for the oil industry with the state as owner and with the previous owners as technical advisers responsible for operation and deliveries to the state.

All the representatives for the oil industry refused to accept the proposals.

On Nov. 30, 1918, the two brothers were detained by the secret police, the Cheka. They were imprisoned, but, following negotiations, they were freed on condition that they would not escape.

Not long after, however, they sat on a train in a pitch-dark compartment filled with Red Guards. They made it to Sweden with the help of friendly Finns, and on Dec. 22, 1918, they arrived in Stockholm, where the rest of the whole Nobel family was gathered for Christmas.

The Final Years of Branobel

An industrial empire had been lost – not just their oil company and the machine-building factory, but also assets in companies in which they were part owners; oil companies, depots, tankers, shipping companies and oilfields.

The Nobels had no oil or funds for their European partners – all was left behind in Russia – and consequently, they had to sell the assets they had in Europe.

However, new opportunities arose.

In January 1919, American company Standard Oil had bought 11 exploration concessions in the still independent Azerbaijan, and was interested in more. The company inspected the Branobel plants in Baku and a price for half of Branobel’s shares was negotiated.

A preliminary contract was signed in Paris on April 12, 1920. The reward for Standard Oil to produce oil at low production costs and sell to the Mediterranean countries was so great that they ran the risk of buying a company that the Nobels perhaps no longer owned.

On April 28 the Bolsheviks arrived in Baku by train. The political situation was uncertain, but Standard Oil was pressing on with the deal – and in New York, on July 30, 1920 the final contract was signed. Half of Branobel’s shares were sold to Standard Oil and the Nobels’ fortune was secured.

After Ludvig’s two youngest sons, Emil and Gösta, died in 1951 and 1955, respectively, the Branobel oil company, established in 1879, was finally liquidated in Stockholm in 1969.

Comments (0)

 

Division Column-DEG Jeffrey Paine

Jeffrey Paine is DEG President for 2014-15.

Historical Highlights

Historical Highlights - Sigrunn Johnsen

AAPG member Sigrunn Johnsen is geological consultant with ProTeam AS, Stavanger, Norway. She is a past president of both the Norwegian Association of Petroleum Geologists and AAPG’s European Region, and recipient of the AAPG Distinguished Service Award and AAPG House of Delegates’ Distinguished Member award.

Division Column-DEG David Vance

David Vance is principal scientist, ARCADIS-US Inc., Midland, Texas, and is a member of the DEG CO2 Sequestration Committee.  

Historical Highlights

Historical Highlights - Hans Krause

Hans Krause is an AAPG Honorary Member, Distinguished Service Award winner and former chair of the AAPG History of Petroleum Geology Committee.

Historical Highlights

A History-Based Series, Historical Highlights is an ongoing EXPLORER series that celebrates the "eureka" moments of petroleum geology, the rise of key concepts, the discoveries that made a difference, the perseverance and ingenuity of our colleagues – and/or their luck! – through stories that emphasize the anecdotes, the good yarns and the human interest side of our E&P profession. If you have such a story – and who doesn't? – and you'd like to share it with your fellow AAPG members, contact the editor.

View column archives

Division Column-DEG Bruce Smith

Bruce Smith is a DEG member and is with the Crustal Geophysics and Geochemistry Science Center of the U.S. Geological Survey in Denver.

Division Column-DEG Tom J. Temples

Tom J. Temples is DEG President.

Division Column-DEG Doug Wyatt

Doug Wyatt, of Aiken, S.C., is director of science research for the URS Corporation Research and Engineering Services contract to the USDOE National Energy Technology Laboratory. He also is a member of the DEG Advisory Board for the AAPG Eastern Section.

See Also: Book

Desktop /Portals/0/PackFlashItemImages/WebReady/book-m101-Energy-Resources-for-Human-Settlement-in-the-Solar-System.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 4054 Book

See Also: Bulletin Article

Sandstone pressures follow the hydrostatic gradient in Miocene strata of the Mad Dog field, deep-water Gulf of Mexico, whereas pore pressures in the adjacent mudstones track a trend from well to well that can be approximated by the total vertical stress gradient. The sandstone pressures within these strata are everywhere less than the bounding mudstone pore pressures, and the difference between them is proportional to the total vertical stress. The mudstone pressure is predicted from its porosity with an exponential porosity-versus-vertical effective stress relationship, where porosity is interpreted from wireline velocity. Sonic velocities in mudstones bounding the regional sandstones fall within a narrow range throughout the field from which we interpret their vertical effective stresses can be approximated as constant. We show how to predict sandstone and mudstone pore pressure in any offset well at Mad Dog given knowledge of the local total vertical stress. At Mad Dog, the approach is complicated by the extraordinary lateral changes in total vertical stress that are caused by changing bathymetry and the presence or absence of salt. A similar approach can be used in other subsalt fields. We suggest that pore pressures within mudstones can be systematically different from those of the nearby sandstones, and that this difference can be predicted. Well programs must ensure that the borehole pressure is not too low, which results in borehole closure in the mudstone intervals, and not too high, which can result in lost circulation to the reservoir intervals.

Desktop /Portals/0/PackFlashItemImages/WebReady/subsalt-pressure-prediction-in-the-miocene.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 5774 Bulletin Article

See Also: CD DVD

Desktop /Portals/0/images/_site/AAPG-newlogo-vertical-morepadding.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 4467 CD-DVD

See Also: DL Abstract

Earth modeling, from the construction of subsurface structure and stratigraphy, to the accurate understanding of rock physics, through the simulation of seismic and nonseismic responses, is an enabling technology to guide decisions in acquisition, processing, imaging, inversion and reservoir property inference, for both static and time-lapse understanding. So it is crucial to capture those earth elements that most influence the geophysical phenomena we seek to study. This is notoriously difficult, probably because we regularly underestimate how clever the earth can be in producing various geophysical phenomena.

Desktop /Portals/0/images/_site/AAPG-newlogo-vertical-morepadding.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 3091 DL Abstract

See Also: Short Course

This course assumes no logging knowledge and seeks to establish an understanding of basic petrophysical measurements and interpretation techniques which can be applied to routine tasks, and upon which more complex and advanced information and interpretive techniques can be built. It strives to provide a strong and coherent foundation for the understanding of other, specialized interpretation techniques involving well log data.


Desktop /Portals/0/PackFlashItemImages/WebReady/sc-basic-well-log-analysis.jpg?width=50&h=50&mode=crop&anchor=middlecenter&quality=90amp;encoder=freeimage&progressive=true 1507 Short Course