MINERAL RESOURCES
OF THE UNITED STATES1886
P. 463
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.
PETROLEUM
P. 465
MINERAL RESOURCES 1886
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.
PETROLEUM
P. 466
MINERAL RESOURCES 1886
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.
PETROLEUM
P. 467
MINERAL RESOURCES 1886
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
Sabunchi
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.
PETROLEUM
P. 468
MINERAL RESOURCES 1886
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.
PETROLEUM P. 469 MINERAL
RESOURCES
1886
“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.
CENTS/BARREL
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
PETROLEUM P. 470 MINERAL
RESOURCES
1886
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
Gallons
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.
PETROLEUM P. 471 MINERAL
RESOURCES
1886
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
Total
PETROLEUM P. 472 MINERAL
RESOURCES
1886
"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
PETROLEUM P. 473 MINERAL
RESOURCES
1886
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
PETROLEUM P. 475 MINERAL
RESOURCES
1886
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.
PETROLEUM P. 476 MINERAL
RESOURCES
1886
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.
PETROLEUM P. 477 MINERAL
RESOURCES
1886
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.
end