From Shernaz Italia, a curious tale of ‘connectedness’, taken from: ‘Stansberry’s Investment Advisory,’ November 2011. The article is titled ‘America’s Oil Boom’.
‘Robert Nobel (Sir Alfred Nobel of Dynamite fame & Nobel Prize founder!) surely knew about Zoroastrianism and its flaming temples before he arrived in Baku in 1876. As a wealthy, highly educated Russian it’s likely he read The Travels of Marco Polo. But whether or not he went to Baku specifically for oil, remains a matter of historical debate. His younger brother, Ludvig, had been placed in charge of the remnants of his father’s business – an arms and heavy equipment manufacturer that was best known for its mining operations. It was his younger brother who banished him from the relative luxury of St Petersburg to the wilds of Azerbaijan – reportedly in attempt to go in search of high quality walnut forests, not oil.
‘The dirt rich famous “Nobels Family” who migrated to Russia from Sweden had long been one of Russia’s most prosperous arms merchants … until their fortunes declined in the 1860s. First, Russia’s Czar stopped buying the firm’s legendary mines. Then the Czar cut back on steam engines, too. By the end of the decade, creditors had seized the firm and had sent Robert’s father back home to Sweden in shame.There, Ludvig was trying to revive his father’s company by manufacturing rifle stocks. And he needed more timber. This is the reason, according to most historical accounts, he ordered Robert to travel to Azerbaijan. But Robert Nobel didn’t find any trees…In fact, there’s almost no natural vegetation whatsoever in Baku. It’s extremely dry and windswept. The timber he found wasn’t alive any more. It had been lumbered for oil derricks. Hundreds of them. Robert Nobel claimed he “stumbled” onto perhaps the greatest oil boom in history, by accident … while shopping for timber Robert Nobel decided on the spot that derricks were better than living trees. He began buying leases on the spot. Over the next few years, the Nobel brothers invested heavily in Baku. In 1872, the oil boom took off when the Russian crown auctioned off the rights to hundreds of leases. Refineries built dozens of factories to transform the heavy crude into easier burning kerosene. Demand for which was insatiable. By 1880, the Nobel’s were the leading oil producers in Baku. And by 1900, just 20 years later, Baku was producing half of all the oil in the world.That may be the one of the reason Hitler was attracted to Russia – Oil.When big new resources like this are discovered, the resulting increases to production are often unimaginable. As production greatly increased, the difficulties of storing and transporting Baku’s oil became paramount. At first, refineries simply put the kerosene in wooden barrels and shipped it on barges across the Caspian and up the Volga River to markets in Russia. But this wasn’t as easy as it might seem. First of all the wooden barrels were expensive, there wasn’t any timber in Baku. Additionally, they leaked. That made the process difficult, dangerous and inefficient. Before production could be economically increased further, the challenges of distribution had to be tackled.’Ludvig Nobel became the “King of Baku” primarily because he figured out how to distribute oil – not because he discovered it. His solution? Pump it directly into the hull of a ship that was specially designed to navigate the Volga. Then, and this is an interesting historical fact, It took oil from Baku, across the Caspian and up the Volga, where it could be distributed across Russia. A fleet of such ships made Baku the world’s busiest port. The Oil Tanker ‘Zoroaster’ was launched in 1878.’
Published on Amitav Ghosh Blog