The BAKU oil fields.
The commercial era of the business dates from the year -1876


Three petroleum fields, or districts, are known to exist in Russia-the BAKU or Apsheron, the Kouban or Ilsky, and the Kertch or Crimean. 

Of these, the latter is of but little importance at present, and requires but little description.  It is near the town of Kertch in the Crimean peninsula.  At a number of villages within a radius of 25 or 30 miles from Kertch, chiefly south and west of that village, oil in some quantities has been found.  Near the Tartar village of Kop-Kootchigan oil is found at a depth of from 80 to 180 feet, the wells being simple holes dug in the ground with out the aid of machinery.  Consular Agent James C. Chambers states, in a letter to the State Department, that two years ago there were 115 of these holes, protected by barrels sunk into their tops, but that no oil had been taken from them for 12 years.  A French company was induced to lease an immense tract of land, and commence prospecting for oil, the result being, that a well 940 feet deep at Chingalek 16 miles south of Kertch, produced for a short time about thirty barrels per day of crude oil, the total production of the well being some 3,500 barrels, which was also the total production of all the wells of this French company.

The other two districts, the BAKU and. the Kouban, are situated at the west and east extremity, respectively, of the Caucasus Mountains.  Of these, two districts the most important, and, indeed, next to the American oil fields, the most important in the world, is the BAKU.

The Baku oil fields. PETROLEUM      P. 464  MINERAL RESOURCES 1886
-BAKU, from which the well known oil fields of the Caspian take their name is a small but rapidly growing town on the Apsheron peninsula, at the eastern extremity of the Caucasus mountains.  Mr. James C. Chambers, consular agent at Batoum, describes this field in No. 74 of the 'Reports from the Consuls of the 'United States’ published in February, 1887,by the State Department.  As this is one of the best descriptions of this field yet published, we make quite full extracts from it.

Petroleum, or ‘neft,’ as the Russians call it, was known to exist in the vicinity of BAKU hundreds of years ago, but the earliest records of production are from the years 1821 to 1825, in which years the Government revenue from petroleum was 131,000 roubles.
In l832, the production was about 750,000 gallons.  Since 1832 a record of the annual production has been kept, which record shows a very small increase until the year 1870, when the production reached 3,000,000 gallons.
         The business until 1873 was a Government monopoly, held at various times by different people, the last holder being American named Mirzoeff, who at that time was a very wealthy man, having, it is said, made his fortune out of the monopoly.  The production was also subject to an excise tax, which must have been a heavy charge upon the industry, as the amount of this tax from the year 1876 to 1877 was more than $1,000,000 on a production approximating 200,000,000 gallons.

The monopoly was abolished in 1873, the business thereafter being open to all who wished to engage in it, and after September 1., 1877, the excise tax was also abolished.

The commercial era of the business dates from the year -1876, when the Nobel Brothers, a trio of Swedish financiers, commenced operations.  These gentlemen, by remarkable energy, enlisted an immense amount of foreign capital in this business, and to them certainly belongs the honor of building up, from a very insignificant beginning, what to-day is the greatest producing and manufacturing business in Russia.

          "The great petroleum-producing district is about 8 miles north of BAKU, and is called Balakhani, taking the name of the Tartar village near it.  Different parts of the district arc known by other names, such as Sabunchi on the south, the Garden on the cast, and Shaitan Bazar in the center; and local statisticians have again subdivided the fields into groups, of which there are 17 in the Balakhani district and one at Surakhani, about 5 miles southeast of the main district.
         At Surakhani 23, wells have been drilled, the last one about the year 1879, but no estimate for the production of these wells has been found and it is understood that they have produced little or no oil for several years.
       There is also a large refinery at Surakhani, which is supplied with crude oil by a pipeline from Balakhani.

Between 2 and 3 miles south of BAKU, on the seashore, is another producing district, the area of which, as at present divided, is very small, called Bibi-Eibat. Twenty-two well have been drilled here, and 14 of them were producing in July 1886. In September, one of these wells was drilled deeper, resulting in a large flow of oil.  The production of this well, it was claimed, was from 30,000 to 40,000 barrels (42 gallons) per day for fifteen days, after which it ceased to flow entirely.  This well was less than 700 feet deep, but it was the deepest well in the Bibi-Eibat district, and had been producing from a shallower depth for two years.  There is also a large and very modern refinery at this place.
A] This is possibly a misprint for Armenian  J. D. W.


The area of what is considered sure-producing territory at Balakhani is between 3 and 4 square miles.  The surface of this territory is loose sand, and the soil is the same as deep as the drill has penetrated, but is interspersed with thin strata of sandstone and solidified clay, which, when brought to the surface, are to all appearance heavy rock, but which can readily be cut with a knife.  Owing to the caving of the sand and the occasional striking of hard, loose stones, which invariably causes what is called a “crooked hole," a very serious obstacle for drillers to overcome, the drilling is exceedingly difficult and expensive.  The caving makes the use of iron pipe from the start to finish of the well a necessity.  The wells are usually started with heavy riveted pipe (14 to 16 inches inside diameter), which is inserted by driving or with hydraulic jacks, after drilling, ahead with a bit larger than the pipe.  The large pipe is continued until it collapses at the bottom, or for some reason refuses to go further, when another pipe is started small enough to go inside of the first one, and is continued as long as possible, and then again reduced until the oil is found and the well finished, which is usually done with 8-inch pipe.

 Owing to the necessity of deeper drilling now than formerly, it is becoming necessary to start the wells with a larger pipe, and Messrs. Nobel are now preparing to commence all new wells with 24-inch pipe.  Russian and German iron is used for the large riveted pipe, and the smaller sizes of pipe, from 10 inches down, which is lap-welded, is also principally German.
          In the past year efforts have been made to introduce American pipe and oil-well supplies, which are unquestionably the best in the world, owing to the longer experience of the American manufacturers, and which can be sold in BAKU at very little advance upon the prices of other material there.
           Now, however, these efforts have been relaxed or entirely abandoned.  The long credits absolutely necessary to buyers of exceedingly doubtful commercial integrity, and the time required for transportation from America made the business of no value to the Americans.

All kinds of machinery and tools are used at Balakhani
A majority of the drillers use pole tools, but a few are using ropes, as in America.  The progressive operators are using either American-made engines or engines made in Russia from American patterns.  American machinery is, of course, very expensive, as the freight and Russian duty almost double the American price.
"The cost of a well at Balakhani varies with the depth to a certain extent.  At the present time I think it impossible to drill at well from 700 to l,000 feet for less than $10,000, and a fair average price is about $12,000.  This does not include the cost of the land, which belongs generally to the operators, although some leases ire held at a royalty of one-third of the production.  The land belongs to different parties, but a great deal of it was originally Government land.  The leases obtained from the Government were generally at a merely nominal rental or royalty, although land purchased in fee cost much more than it can be had for at present. 


Now, however, the Government will neither rent nor sell any more land, and it holds quite a large c tract in the center of the field, which has not yet been drilled, upon.  The length of time required to drill a well is also uncertain, as it is from three months to three years; but I think about six to eight months the average time.
Comparing numerous sources as to the number of wells drilled at Baku, I believe the following was nearly correct in January of this year (1886):
Number of wells at Baku up to January 1886.
Kind of well.                 Number.
 Producing wells         164
 Drilling wells              104
 Abandoned wells         200
  Total                          468

"The term I drilling wells” does not mean that work is being actively prosecuted, but that these wells are reported as in various stages of work, i.e., unfinished.  Since the above figures were obtained, I have seen the number of producing wells estimated at 185, but as that was in September 1886, it is quite probable that several new wells were completed since January, 1886. 
"An estimate, of the production of these 164 wells, based, it was claimed, upon reports from their owners, was 58,000 barrels (of 42 gallons) daily.  Considering the number of holidays in Russia, and the fact that for several months in winter, owing to a lack of transportation facilities, the river Volga being closed by ice, the wells are very irregularly pumped, this estimate is a fair one.  Estimating, however, the refined oil exported at 30 per cent of the crude, and adding the small amount of crude shipped, will not give more than 31,000 barrels per day as the average daily crude production for 1885.

Depth of wells
-The depth of the wells varies from 175 to 1,030 feet, there being only one well of the latter depth, and I am not positive that it is producing profitably.  The average depth of the wells is steadily increasing, and is now said to be 500 feet as against 350 feet in 1886.  The average depth of new wells is, however, more than 500 feet, probably over 600 feet.  By many it is claimed that the increasing depth of the drilling is proof positive of the exhaustion of the territory, and that the depth of the drilling increases 50 feet for every 500,000,000 gallons of crude taken out, but I have seen no calculations as to the depth of the lower strata of oil.  Others claim that both the yield and the quality of yield:  I am doubtful. 


The following figures are given as a comparison of the yield of various parts of the territory at different depths:
  Localities. Depths  No.  Daily production. 
   Feet               Gallons.
   175 to 280         77,855
   280 to 350        1,717,000
   350 to 420         917,000
   420 to 490         1,317,560
   490 to 560         416,000
   560 to 630         225,000

Group V.-(A very rich section on the north of the field) 
   245 to  350        12    11, 000
   350 to 420         6      13,300
   420 to 490         3      10,501
   490 to 560   No wells.
   560 to 630         2      25,000
   630 to 730         1      60,000

   350 to 420         8      15,415
   420 to 490         8      14,685
   490 to 560   No wells.
   560 to 630         2      22,500
 Shaitan Bazar 
   175 to 280          6      8,330
   280 to 350   No wells.
   ,350 to 420         2     110,000
   420 to 490          2      15,000
   490 to 630   No wells.
   630 to 700         1 60,000

This is intended to show a general increase in yield in all parts of the field from deeper drilling, but the fact that the shallow wells are all old, while the deeper ones are comparatively new, must not be over­looked, and while it does not make it perfectly clear that the deeper wells are more productive than the shallow ones, it certainly shows no exhaustion of the territory.
When Balakhani oil wells do not flow they are pumped with what is called in the American oil fields a bailer.  The pump or bailer used varies according to the size of the well-pipe, as it is made of a pipe to run freely inside of the well-pipe; but they are much larger than those commonly used in American, and sold from two to ten barrels each.

Many of the wells flow naturally and with great force when the oil is struck.  The flowing wells, or, as the Russians call them, ‘fountains' are fitted upon the top of the well-pipe with a gate or slide valve, and until oil the top of this valve is an elbow of pipe the same size as the well pipe, which directs the flow, when the valve is opened, horizontally into the trough or ditch.  Many of these fountains can be opened or closed at will.  If oil is required they are opened, and the oil allowed to flow until the necessary quantity is obtained, when they are again closed.  This, of course, is a great advantage, the well itself answering the purpose of a fault or reservoir which is always full.
The quantity of crude produced by some of these flowing wells is incredible to those who have never seen one of them flowing.  The most productive well ever drilled at Balakhani was NOBLES' No. 15.  This well, while it did not show so furiously as in any others, flowed steadily the full size of the pipe (8 inches) when opened for years.  It was handled just as a large tank would be, only opened when oil was required. 


I do not know the exact length of time it produced profitably, but its total production was over 1,800,000 barrels (42 gallons).  Nobels' No. 9 was another large well.  It was the largest well ever struck-, for the first nine days, as it flowed that length of time steadily a solid column oil the full size of the pipe (8-incb) to a height of two to three hundred feet.  The estimated production of this well for the first nine days was 50,000 barrels per day and its total production for the thirty-two days it flowed was over 900,000 barrels.  In last June the Nobels struck a well (No. 32), which was the most difficult to control they ever had.  This well was furnished with 8-inch pipe; and after it had flowed furiously for a day or two they succeeded in shutting it off by Using four 8-inch gate valves on the top of the pipe.  They then worked a week strengthening the derrick by using heavy timbers from the tops of the valves to the sides of the derrick and other timbers across, until they had the derrick a mass of heavy timbers.  While this work was being done the valves commenced to leak, and the well was producing oil faster than it could be pumped away through two lines of pipes, one 3-inch and one 4-inch.  They finally added a 6-inch line, with a large pump, to their pipe-line capacity, and then attempted to open the valves.  In a very few minutes the valves and almost all of the net-work of timbers in the derrick were blown away, and the well flowed terrifically for several hours, not oil, but stones and mud.  It flowed intermittently dirt, stones, and oil for about fifteen when it quit entirely, having produced over 100,000 barrels of oil.  All the large wells have stopped flowing in the same abrupt manner, and the same cause of stoppage is assigned to all of them, viz, the collapsing of the pipe at the bottom of the well.  The pipe in this well (No. 32) was American, and it was hoped that it would stand the test the first of the, kind, imposed upon it, as it is certainly much superior to any of the other pipe used here; but these hopes were not realized, at least not fully; for, although  it did not stand this test entirely, it stood it for fifteen days, and it was a much more severe test than any other pipe has been driven.  The depth of this well was 860 feet, and at that time, it was the deepest producing, well in the field.

The length of the profitably producing life of Balakhani wells varies greatly, and an average is unobtainable.  As I have already shown, some productive for years, while others last only a few days.  They do not seem to affect each other’s production, even when within a few feet of each other and producing from about the same depth.  The oil contains a great deal of sand, and some of the flowing wells throw out immense quantities of sand with the oil, sufficient in several cases to completely bury the engine house and out-houses in their vicinity.  I am again indebted to Mr. Tornudd for the following information regarding the production of the wells of Nobel Brothers.

 “Nobel Brothers have drilled 74 wells in the Balakhani district, of which number 32 are now producing.  Of the 74 wells, 22 have produced over 115,000 barrels (42 gallons) each, and the aggregate production of the 22 wells to September was over 7,600,000 barrels, an average of more than 345,000 barrels each.  Eight other wells have produced nearly 100,000 barrels each, and almost all of the 74 wells have been profitable producers.
Iron tanks for crude Oil are but seldom used; this is also true for iron pipe for conducting the oil from wells for reservoirs.  Instead of iron pipe, wooden box-troughs or dirt ditches are used for the latter purpose, and reservoirs are made by excavating the ground in the vicinity of the well, or by simply throwing up walls with the sand that has been thrown out of the wells.  Of course, there is a loss from the ground absorbing the crude, but the price is so low that this loss is insignificant.  From the reservoirs, the crude is pumped through pipes to the refineries, which are located on the sea shore, about two miles east of Baku, at Chornai-Gorod (Black Town).
"The distance from the wells to refineries is about 8 miles, and as the average elevation of the wells above the Caspian Sea is 175 feet, the piping of the crude is not at all difficult, There are now 14 pipe lines from 3 to 6 inches in diameter, and belonging to thirteen different owners.  The pumps used either are of American manufacture or made in England or Russia from American patterns, with the knowledge and consent of the American manufacturers and patentees.  The latter, I am informed by men of experience with both kinds, are by no means as good as those made in America, and I have heard surprise expressed, at the American manufacturers allowing their machinery to be so indifferently constructed in England and Russia.
"The aggregate daily capacity of the fourteen pipe lines is about 100,000 barrels.  The nominal pipeage charge is 1 kopeck per pood (about 4 cents per barrel), but the pipelines are generally owned in connection with both wells and refineries.

"Price of crude oil
The following figures, although not very complete, will give some idea of the prices for crude oil at the wells per barrel of 42 gallons in the past five years:

Prices of crude petroleum at the wells in the Baku oil fields, from 1881 to 1886.
 January and February, l881 123
 April to June, 1881  7 .8
 July, 1881.   6.1-10.5
 August, 1881  .. 6.0 - 12.3
 September to December 1881 8.2
 January  to Mar1882  12
 April to October1882  10 – 12 
 Nov to December, 1882 8.5
 January to March   1883 12.3
 April to July, 1883  4.1 – 8.5
 August to November, 1883 2.1 – 6.3
 February to March, 1884 4.5 – 7.7
 April and May, 1884  7.7 – 8.3
 June, 1884   14.7
 July and August, 1884 16.1
 September ' 1881  14.6 to 16.1
 October to December 1881 9.8 to 10.4
 January, 1885   8.5 to l0.5
 February 1885   14.7
 March and April, 1885 16.1
 May and June, 1885  12.3 – 16.5
 July, 1885   16.5
 September, 1885  10.25
 October to December, 1885 8.7 to 4.5
 January to March 1886 3.7 to 4.2
 April to June, 1886  8.7 to 10.2


The refineries, with the exception of the three, one it Bibi-Eibat, one at Surakhani, and one in the town of BAKU (the latter having been idle for some months to the financial difficulties of its owners, are all located at Chornai-Gorod; they are exceedingly numerous, and of every description and capacity, from the immense, modern worlds of Nobel Brothers, capable of turning out 6,000 barrels of refined oil every twenty-four hours, down to the primitive barrel still, inclosed in a little stone hut, of the Tartar refiner.  The total number of refineries is generally said to be more than two hundred, but the statisticians Seem to consider only about 136 as worth mentioning, as follows:

Number of refineries in the BAKU oilfield and their total capacity
   No. Stills. Gallons
Large refineries  12 216 747,500
Smaller   15 115 159,000
Small   109 210 315,000
 Total  136 541 1,221,550

In the official returns for the year 1885 only 87 refineries are mentioned, as follows:
Production from the refineries of the Baku district in 1885
   N o. Refined oil. Lubricating benzene. Total.
 Large refineries 10 123,898,430 7,317,500 205, 000 131,440,930
 Small    36,598,635 2,675,000   39,273,635
 Totals    160,497,065 10,012,500 205, 000 170,714,565

The following are the official figures for the actual output of petroleum products from Baku for the last five years (in gallons)
Output of petroleum products from                              l88l  to 1885.
  1881.  1882.  1883.  1884.  1885.
Refined  58171425 62,808,860 59,639,400 108,609,855 131,613,925
Other products 59:467:110 99,498,910 85,541, 305 154,511,855 174,637,070
 Total 117,638,535 16-, 397, 770 145,180,705 263,121,710 306,250,995

Of the above the following amounts were exported, 1883: 1,934,670 gallons; 1884: 25,284,720 gallons;
1885: 35,000,000 gallons.


The estimate given of the capacity of the 136 refineries is no doubt reasonably correct.  Owing, however, to the numerous holidays in Russia, and the impossibility of doing anything for several months in the winter, for causes already explained, the maximum annual capacity of these refineries would hardly be more than two hundred times their maximum daily capacity, as two hundred working days in the year is a fair estimate for this country.  This shows an abundance of refining capacity, as the product of the refineries in 1885 was not more than half of this estimate.
Even here in Russia there is a great difference of opinion as to the relative merits of Russian and American illuminating oil, and while it is not generally asserted that the Russian refined can be made as good an illuminant as the American, there is no doubt that it can and is made to burn quite well enough for all purposes, and emits no disagree­able odor while burning.  After taking from Russian crude oil, say, 30 per cent, Illuminating distillate, about 15 per cent. is taken from the residuum, which is called 'solar oil,' and which, although a nice looking white oil, is too high fire-test to burn in ordinary lamps and not sufficiently good for lubricating purposes.  This is generally mixed with the astatki, or crude residuum, although the last Baku congress of petroleum people I resolved that its use should be made compulsory for
the purpose of lighting public buildings theaters circuses hotels etc., that the use of kerosene (refined) should be prohibited in such buildings and that the ordinary restrictions applied to mineral oils in transporta­tion, storage, etc., should be taken off solar oil, and that it be placed in the same category with vegetable oils.' This is, however, only a, petroleum producer's resolution, which will be understood no doubt in Amer­ica.  After the solar oil is taken, the lubricating-oil distillate is taken off, and varies from 20 per cent. to 25 per cent.  From this distillate a very good lubricant is made, as it is affected neither by intense heat nor great cold.  The lubricating oil is made in Baku, but great quantities of the distillate are also shipped to England, France, Belgium, and Ger­many, and there purified and made into lubricating oils.  After the fore­going proportions are taken from the crude, the residuum, down to about 15 per cent. of the whole, is taken off, and generally mixed with the solar oil.  This is called astatki or crude residuum, and is the fuel of southeastern Russia.  As the Caspian and Volga steamers, many of the railways in eastern Russia, and the Trans-Caucasian railway use it for fuel, there is a great demand for it, and it sells at an average price of 0.1 cent per gallon free on board cars or steamers at Baku.  The 15 per cent left in the still is called mazoot, and, as it will not burn, is a total waste.  A few years ago it was used in limited quantities to sprinkle the streets of Baku, which was a very good idea from a sanitary point of view.

Estimated as above, the yield of Russian crude in merchantable products is about 85 per cent, as follows:

Estimated yield of Russian petroleum in merchantable products.
 Per cent.
Illuminating oil 30
Lubricating oil 20
Solar oil 35
Astatki (crude residuum) 15
Waste 100


"The specific gravity of Balakhani crude oil varies, but not sufficiently to make any difference in its value, so that it is all run together, form­ing a crude of about 0.865 specific gravity, or 320 Baume'.  It contains no paraffin, and very little benzene is made from it, none of which is lighter than 0.700 specific gravity.  As I have said before, I think it exceedingly probable that the crude will be of a less specific gravity as the drilling deepens, as I find the oil from -Nobels' No. 32 about 0.850 specific gravity, or 3410 Baum6.12
In this connection, it is interesting to review briefly, for comparison with Russian petroleum, the chief products obtained in refining American petroleum.  It would be much easier if instead of considering American" petroleum, the discussion were limited to 11 petroleum from the Brad­ford district 11 or to some other limited area.  The products from crude petroleum and the percentage of each depend not only upon the char­acter of the crude oil itself, but also upon the difference in the methods of distillation and upon the form of oil sought as the principal result of the distillation.
That there are great differences in the character of oil is well known; this is shown in the different prices paid per barrel.  The Franklin crude lubricating oil is worth four times what the ordinary Western Pennsylvania crude oil brings, while the lower country oils of Pennsylvania, which are used chiefly for illuminating purposes, because of their greater yield of illuminating' oil, bring considerably more per barrel than those of the ordinary upper country oils.  It is also a fact that every manufacturer has his own methods and processes of distillation, which he guards as valuable secrets.  These methods give varying re­sults, not, however, differing greatly when the same product is sought as the result of distillation.  It is also true that the percentages of the different products vary, as one or the other of these products is the chief object of the distillation ; for example, distillation, having as its chief object the production of illuminating oil, would give a larger per­centage of illuminating oil than would be given at works where the chief article of manufacture was lubricating oil.  Owing to these facts, there­fore, the percentage of the commercial products derived from the crude petroleum vary greatly at different works from different processes of manufacture.

The three chief products of petroleum, or, better, the three products of the first process of distillation in making illuminating oil, are: naphtha, Illuminating oil and residuum.  Each of these products is redistilled ­ the naphtha into gasoline, benzene, and the various lighter oils.  The illuminating oil, if a high test is desired, has a larger portion of the lighter oils removed from it, while the residuum is broken up, by processes of redistillation, freezing, and hydraulic pressure, into paraffin wax and oil, vaseline, cosmoline, etc.  After these are taken from the residuum there is a coke left which contains 90 per cent of pure carbon from which carbon points, used in electric lighting, are manufactured


The following may be taken as a fair average of the commercial products obtained from crude petroleum of 450 Baum6, and the oils made in a process of manufacture.  It should be said that this represents good work:

Percentage yield of oils in the distillation of crude petroleum

  Product. Per cent.
 Naptha   12
 Illuminating oils 72
 Residuum  10
 Loss   6
 Total   100

While it is generally believed that there has been such an improvement in process of distillation in the last ten years as to materially in­crease the yield of commercial products and decrease the loss, the fact seems to be that the improvements have rather been in the way of more careful working of old processes, thereby increasing the yield and reducing the waste.  For example, the yield of naphtha is very much greater than formerly; but this increased yield is from no new process, but rather from a more careful saving of these light products.  Where 8 to 9 per cent. of naphtha was formerly secured, now 10 to 12 percent., and even in some cases 16 per cent., is saved.  This is chiefly the result of closer and tighter tanks for saving the naphtha and more complete cool­ing.  Heat is most carefully excluded, some naphtha tanks even being surrounded with brick walls, or placed under ground to shut off all heat and secure better refrigeration.  As a result, a larger portion of the naphtha that passes over is condensed and saved instead of passing oft as gas.
From a report by Col. C. E. Stewart, published in the Chamber of Commerce Journal, England, we take the following statement as to the cost of refining petroleum at Baku:
”If we take the cost of 31 poods of crude oil, which is the quantity required to produce a pood of kerosene at the wells, at 2 kopeks per pood, to be 7 kopeks; delivery of this quantity through the pipe line to the factory and other expenses at, say, 3 kopeks; cost of refining, .say, 5 kopeks, we shall obtain, as the price of a pood of kerosene, 15 kopeks.”

“On the other hand, we list deduct at least, as the value of the astatki, or residue which remains after the distillation, 3 kopeks ; leaving as the cost of production of a pood of kerosene at BAKU something like 12 kopeks.  The cost of transport, per pood, in tank cars by the railway, to Batoum, 16 kopeks; other charges at Batoum, including shipping, 2 kopeks; loss of quantity, &c., 1 kopek; leaving as the actual cost price of a pood of kerosene delivered on board ship at Batoum 


The shipments of refined for the, same years were:

Shipments of refined oil from Baku from 1883 to 1886, inclusive.
  By sea  By railroad Total.
  Gallons Gallons Gallons.
 1883 58,551,595 13,585,1189 72,136,693
 1984 88,652,210 19,414,870 108,067,080
 1885 95,812,860 36,761,240 132,574,100
 1886 90,928,470 69,661,495 160,559,965

 Total 333,945,135 139,422,705 473,307,840

Deducting from the last year's shipments the amount exported by sea about 10,000,000 gallons and by railway 30',000,000-we find the total amount taken by the home, trade was 115,000,000 gallons.
It is known that on January 1, 1886, there remained in tanks, unsold, at Tsaritzin alone, about 20,000,000 gallons refined, while the stocks at Dominino, Moscow, St. Petersburg, and Warsaw were fully as much more, making the total refined stocks in the home markets at that time about 40,000,000, which added to the shipments of 1886-115,000, 000 gallons-makes the amount taken by Russia last year 155,000,000 gallons. Admitting the home consumption in 188G was 80,000,000 gallons, the stocks in Russia the first of this year were nearly twice as large as the year before, or about 75,000.000 gallons, of which at least 25,000,000 gallons were at Tsaritzin, 20,000,000 gallons at Dominino, (a) and the balance at other points.  This accounts for the low prices (25  kopeks per pood)  (b) and present depressed market at Tsaritzin, and this is why the Nobels (as was reported by the Volga-Don paper) were selling reduced at their numerous warehouses all over Russia at Tsaritzin quotations, thus keeping buyers from Tsaritzin, for the -Volga navigation will soon be open, and stocks in Russia must be disposed of at any price to make room for the new refined, which must be shipped upon the opening of navigation or the refineries remain idle.  Of course, it is better to sell cheap and continue working than to stop refining altogether.
The foreign export, although annually increasing, owing to the limited carrying capacity of the Trans-Caucasian railway, cannot satisfy the demand abroad for our refined.  In 1885, the export to various coun­tries from Batoum amounted to 26,865,000 gallons, and in 1886, it was 35,000,000 gallons.  In the former year, nine different countries were reached by our export, while in the last year we sent refined to seventeen different countries.  To former consumers were added Denmark, Belgium, and even countries so far off as Algeria, -Egypt, and India, the sales to which countries began in the last half of the year.  Of course our refiners will not sell direct to those countries, as that trade will be taken care of by Rothschild’s, to whom the refiners will sell by contract at 

a Nobel principal distributing station, near Orel.
b 2.2 cents per gallon.  The average freight rate from BAKU to Tsaritzin is 1.3 cents
per gallon.


prices agreed upon, however, only in case no pipe line for crude is constructed to the Black Sea, for in that case the BAKU refiners will lose the export markets and be confined to the home trade only, which is already oversupplied.
"The total shipments of refined last year were 160,589,965 gallons; adding to this the local consumption will give us 165,000,000 gallons as the total production of refined; calculating 3.5 gallons crude for 1 gallon refined we gret a total of 575,000,000 gallons crude; adding to the home consumption of crude and the crude shipped about 50,000,000 gallons, and allowing 50,000,000 gallons for waste, loss in pumping and other causes, will give us 650,000,000 gallons crude as the total production for l886.  These figures will give a very fair idea of the extent of our producing and refining business."
A private letter from a Russian gentleman largely interested in the Russian petroleum trade to the American Manufacturer gives his impression of the outlook for 1887 and 1888 as follows -.
“In 1887 it is quite certain that the quantities which Russian refin­ers can send ,through will not exceed in the aggregate 1,500,000 barrels, or 200,000 more than in 1886.  There is no reason to believe that the worlds consumption will not increase during this year more than this 200,000 barrels.


only for twelve years, whilst three years are allowed for construction.  The pipe is to have a capacity for delivering close upon 3,000 tons of crude naphtha per working day of twenty-four hours, and the toll which the contractor may levy is limited to 11 kopecks per pood, or, at the present rate of exchange, about $3 per ton.  The contractor is also required to put down a duplicate line within a period of two years, as soon as the traffic on the first line has reached 580,645 tons per annum.  With this increased traffic, the toll is to be reduced by about 10 per cent, and a royalty of 15 cents per ton will have to be paid to the Government.  The contractor, on obtaining the concession for the work, will be required to deposit caution money with the Russian Government, the amount to be determined by the minister of public domains and finances at St. Petersburg.

The Kouban oil field
The second in importance of the Russia oil fields, and the only one, with the exception of the BAKU, that gives any promise of producing petroleum in commercial quantities, is the Kouban, situated at the western extremity of the Caucasus Mountains.  This district is on the northwestern slope of Mount Oshten, the most western part of the Caucasus.  Operations were begun here in 1864; the first wells being sunk near the Black Sea, coast.  No wells were put down at Ilsky until 1873; in that and the two following years nine wells were sunk the deepest to the depth of 527 feet; but though some oil was found, one well pumping 2,100 gallons a day and another 1,900 gallons, the venture was an unprofitable one, and after the death of the gentleman owning the concession, Colonel Novosilvsoff, his lease was granted to Mr.Tweedle, who ultimately conveyed his rights to the Standard Russe Petroleum Company," of Marseilles.  The wells of this company, of which in 1866 some 69 had been bored, are near Ilsky, some 47 miles in a nearly direct line from Novo Rassisk, the refining and shipping point of this oil-this town being a port on the Black Sea, an the oil being conveyed from Ilsky by a pipe line, 47 miles long, the only one of any length in Russia.  It crosses quite a range of hills to Novo Rassisk, and there is considerable difficulty in operating the line in winter owing to the freezing of water, of which the oil carries considerable.  Five pumps are maintained alone, the line; three of them are used generally, the other two being used as auxiliaries in winter.
Early in 1886, there were some 15 wells producing, the total output being some 1,500,000 poods.  New wells were at that time being bored with the expectation of a larger production in the last half of 1886.  Both heavy and light oils are produced; generally the latter oil resembles the BAKU oil in appearance, but is said to produce a larger proportion of illuminating oil than the BAKU, the yield of the latter being some 28 per cent and of the Ilsky - 33 per cent.  The wells in this district are drilled in a similar manner to those of BAKU, and differ greatly from the methods employed in the United States, as a. reference to the statement concerning BAKU petroleum will show.  At Ilsky, however, although for a certain depth the tubes, made of rolled plate iron 3/16 inch thick, riveted together, are used as at BAKU, jet at greater depths these are replaced byt tubing 10 inches in diameter.