Archive

No. 3, 2010

Alexander Matveichuk ,
Ph. D. (History), Member of the Russian Academy of Natural Sciences

PETER THE GREATS PLANS FOR RUSSIAN OIL


On the 310th anniversary of establishment of the first state Mining Department in Russia

Emperor Peter the Great (1672-1725) was responsible for great economic, social and administrative transformations in Russia. The reforms he put through in the country included establishment of a mining works industry, related management bodies and mining legislation, introduction of mining education and much more. He is also known for the first attempts made at practical use of oil in Russia.

The launch of a great business

On August 24, 1700, according to Order of Peter the Great, a special Mining Department was set up to manage mining: "In Moscow, gold and silver and other mining to be the responsibility of okolnichy Alexey Timofeyevich Likhachev and clerk Kozma Borin, to be located separately in the Great Treasury Department and be referred to as the Mining Department." In addition to the people mentioned, the new department was to have 2 senior and 2 junior under-clerks.

Two months after the Mining Department was set up, on October 30, 1700, the Emperor sent a note to Prince Ya. Dolgorukov: "to send a note to the Great Treasury to allocate 200 and 10 packages of paper to the Mining Department to cover expenses and, in future, to issue immediately any money and paper..."

Peter the Great's next order "On prospecting for gold, silver, copper and other ores throughout Russia; on inspection of prospected ores on site by Voivods, and on remuneration to private persons performing such prospections" followed on November 2, 1700. It determined quite clearly the tasks of the department, covering all stages of mineral deposit exploration. For instance, it stated with respect to ore deposit prospecting expeditions: "Anyone in Moscow or other cities who discovers or will discover gold, silver, copper or other minerals in land belonging to the Tsar or other person shall, in Moscow, notify some noble and, in other cities, Voivods, who shall visit and explore the places where the minerals are discovered."

Throughout Russia, on Peter the Great's initiative, mineral wealth prospecting was undertaken and, by January 2, 1703, the newspaper Vedomosti, edited by the Emperor himself, announced: "From Kazan they write that much oil has been found on the river Sok..."

In the hope of finding oil within the country, Peter the Great focused on the potentially oil-bearing territory between Terek and Sunzha. He issued a decree to prepare an expedition to this region, but its departure was delayed owing to the pending visit by the "Grand Moscow Embassy" through countries of Europe.

In 1716, Peter the Great traveled abroad for a quite extended period. During his visit to Europe, he met with outstanding scientists and mining experts. These meetings and familiarization with the state of affairs in the western economy promoted the Russian Emperor to make certain conclusions regarding the need for rapid modernization, including in the mining industry.

After returning home, Peter the Great signed a decree on setting up the Collegium of Manufacture and Mining, to be headed by Yakov Bryus (1670-1735), subsequently a Count and Fieldmarshal.

The delayed expedition in search of oil-bearing territories in Russia took place in 1718 and Surgeon in Ordinary to the Emperor Gottlieb Schober was sent, by order of Peter the Great, to the Terek and Sunzha region. Not far from a hot mineral spring, he discovered that "from some mountain, oil or petroleum pours out... no-one collects it or uses it."

By order of Peter the Great, statesman and diplomat Artemy Volynsky (1689-1740) viewed the terrain in this region. In a letter to the Emperor, he suggested that "it is sulphur balsam that pours out", which is there "out of ignorance called oil" and is used "instead of tar to lubricate carts, for which, Your Highness, can be produced in the amount of thirty or more poods."

Alongside the sharp increase in the number of enterprises in Russia, it proved inconvenient to combine management of mining and manufacturing facilities within a single state department. On December 10, 1719, Peter the Great issued an order "On establishment of the Mining Collegium for separating out into a single department ore and mineral matters," which formed a special institution - the Mining Collegium with local Mining Offices. In this Decree, the Emperor wrote: "In our Russian state, compared with many other countries, there are abundant minerals and needed metals which up to now have been looked for without proper diligence... This Gift of God should not be allowed pointlessly lost beneath the earth."

On the same day in 1719, Peter the Great also issued the Mining Privilege. This legislative act determined, right until 1807, the government's policy in the ore mining industry. The Mining Privilege declared minerals to be the property of the Emperor, irrespective of to whom the land belonged. The landowners were granted preemptive mineral development and factory construction rights. It should be stressed in particular that this meant removing mining from subordination to the civil authorities. The Mining Privilege established right of inheritance to works, protected industrialists from interference by the local administration, guaranteed financial assistance for construction of facilities and free sales rights to smelted metal, and determined the amount of remuneration for ore discovered. In 1739, the Mining Privilege was supplemented by the special Mining Regulation.

Later, the Emperor maintained his interest in oil and even ordered that "knowledgeable people" be brought together to discuss the oil business. An oil source in Ukhta was thoroughly studied and, in 1724, eight bottles of Ukhta oil were delivered to the capital.

Peter the Great's Caspian campaign

In the first quarter of the 18th century, the Caspian region drew the particular attention of Emperor Peter the Great, who considered it to be a major strategic area for protection of the Empire and for further development of Russia's trade with the East.

Objectively, it was Persia that, at that time, claimed the role of partner of the Russian Empire in this sphere. Persia had considerable opportunities and, in turn, was in great need of a strong ally capable of protecting it against the claims of the ambitious Ottoman Empire in the west and the troublesome Afghan tribes in the east.

The given circumstances and the exacerbation of the situation within Persia dictated the need for Russia to act in different directions. The first step was the signing, in 1718, of a mutual trade agreement with Sultan Hussein. This envisaged certain actions on the Russian side, both to protect its own interests and to render, if necessary, an assistance required by the legitimate Persian government.

The alarming news arriving regularly from Persia showed that account had to be taken of the negative scenario of development of events and Peter the Great began to prepare for a campaign by the Russian Army to the Caspian Sea.

The full preparations for this difficult military operation took almost three years. Initially, in 1719, two Russian officers, Fyodor Soymonov and Karl Werden, carried out a thorough reconnaissance of the area, drawing up a detailed map of the Caspian Sea.

It should be noted that Fyodor Soymonov made a special visit to the oil fields on the Apsheron Peninsula. It may also be assumed that Peter the Great was aware of his communication that, since 1716, the Shah's court had received over 49,000 rubles a year, in Russian terms, for the oil from Baku oil wells farmed out to the Persian Shah's vassal, Sultan Muhammed Hussein Fetig Ali. Considering that a Russian Army soldier's keep cost up to 1.5 kopecks a day, the given sum would suffice to maintain almost a ten-thousand strong Russian army for a year.

The numerous notes made by Peter the Great on the reports submitted by Fyodor Soymonov and Karl Werden and by the Russian Ambassador to Persia Artemy Volynsky show convincingly that "petroleum" was at the focus of the Emperor's attention.

In the winter of 1721-1722, when armed divisions of belligerent Afghan tribes overthrew Persia's ruler Sultan Hussein, the lawful successor to the throne, Prince Tahmasp, was forced to flee and take refuge in the Caspian regions of Persia, Peter the Great gained a justified excuse to act in support of the lawful authorities. He personally headed a fifty-thousand-strong army during the Persian (downstream) campaign of 1722-1723.

The beginning of May 1722 was the official start of the Caspian Campaign. The navy was under the command of Admiral-General Fyodor Apraksin (1661-1725) and the fleet of scows under that of the above-mentioned Lieutenant-Commander Karl Werden, who knew this region thoroughly.

In August 1722, the Russian ships were on their way to Derbent and near the city of Tarki, Emperor Peter the Great and several of his comrades-in-arms disembarked. They went on foot to the oil wells, which "His Highness wished to view." Subsequently, the Port of Petrovsk was built nearby.

On August 23, 1722, the authorities and people of Derbent met the Russian Emperor with full honors. The Naib (head) of the city handed him the keys to the city gates. The Emperor then returned to Astrakhan and put Lieutenant General Mikhail Matyushkin (1676-1737) in command of the Russian troops.

The oil wealth of the Russian Empire

In Astrakhan, on November 4, 1722, Peter the Great signed an instruction for the commander entitled "When, God willing, we take Baku, what to do." The third item consisted of the phrase: "Find out about duties and incomes, especially about oil and saffron. How much there used to be and how much there is now, how much went to the Shah and how much was in pocket."

On August 18, 1723, by order of Lieutenant General Matyushkin, an "Inventory of oil wells and storage facilities in Baku" was drawn up. According to this document, "on the field," i.e., within 10-20 versts of Baku, there were 66 operating wells and 16 storage pits; at the second field, 20 versts from the city - 4 wells with "white oil" and, outside the city gates, there were 14 storage pits containing oil and 5 empty ones.

In a second instruction of September 9, 1723, Peter the Great demanded that several poods of oil be sent. These were delivered to St. Petersburg in eight bottles in early 1724.

Soon afterwards, the legitimate government of Persia, represented by the new Shah Tahmasp, recognized the Russian troops' Caspian Campaign as a liberation mission. In acknowledgement of saving the country, under the Treaty of St. Petersburg concluded on September 12, 1723, Persia conceded to Russia the western and southern areas of the Caspian shore, including the cities of Derbent and Baku, as well as the provinces of Gilan, Mazandaran and Astrabad.

At the end of September 1723, Lieutenant General Matyushkin, who was in Astrakhan, received an order from Emperor Peter the Great "On His Imperial Highness taking permanent possession of the cities of Derbent and Baku and other provinces."

In May 1724, the Emperor once again ordered that he be sent "a thousand poods of white oil or as much as possible." In response to this order, that same summer, Lieutenant General Matyushkin had over 149 poods of "white oil" transported from Baku to Astrakhan and thence to Moscow.

After the death of Peter the Great in February 1725, the interest in the practical use of oil decreased sharply, but it follows from archive documents that, by decision of the Commerce Collegium, in February 1726, 3 barrels of oil were sent to Holland to the merchant Lyubs. The foreign agent was asked to find out its real price and potential sales volumes. And although, judging from the Commerce Collegium report, the demand for oil in Holland was negligible, and in spite of the commercially unsatisfactory results, this was still the first attempt at foreign market research into the oil market, made by a Russian government body over 280 years ago.

During the next decade, Peter the Great's crown-bearing heiresses failed to keep the Caspian lands added to the Empire, including the oil fields on the Apsheron Peninsula. The succession of "palace coups" under the Empresses that came after Peter substantially undermined the Russian Empire's foreign policy positions. As a result, under the Rasht Treaty of 1732 and the Ganja Treaty of 1735, the Caspian regions, including Baku, were returned to Persia.




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Oil of Russia, No. 3, 2010
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