Author: Gumru Eyvazova, Senior Lawyer, GRATA International
Azerbaijan is one of the world’s oldest oil producers and the city of Baku and the Absheron Peninsula have long been known as historic sites for oil.
After the industrial reversal of works in the oil fields in Baku in the 70s of the last century, more than a dozen foreign firms turned their attention to the richest oil region. The first foreign company in Baku was founded by the Nobel brothers - Alfred, Ludvig and Robert. Few people know about the deep connection of the Nobel Prizes with Baku’s oil. 12 percent of the prize was said to be from Alfred's shares in the Nobel Brothers' Petroleum Company in Baku. In the mid-70s of the last century, the Partnership “Nobel Brothers” acquired several oil related areas and a small kerosene plant in Baku. In a short time, the Nobel Brothers owned oil wells in Surakhani, Balakhany and Bibi-Heybat. Having rented land in the Black city, they built bridges for oil refinery, sulfuric acid, copper smelting, cast iron plants and ships. The Nobel Brothers’ capital hit 3 million rubles when they celebrated the venture’s 5th anniversary.
One of the brothers Ludwig Nobel, a talented engineer who had a great experience on modern organization of industrial production, moved to Baku in the autumn of 1876. He was in high spirits engaged in the oil field reconstruction. In 1882, Ludvig invited more technical staff to Baku from Finland, Sweden, Norway and Germany, and founded a colony that he called Villa Petrolea, located in what was at that period called, and still is - the "Black City" district of Baku. Oil products from their venture were distributed all over Russia by train and by ship to Central Asia and Europe. The logo of the Nobel Brothers' Partnership depicted the Surakhani Fire-worshippers' Temple, with its flames fueled by gas from the oilfield nearby. It should be noted that the Nobels’ ships took on names of various religious and philosophical personalities - Zoroaster, Mohammad, Buddha, Brahma, Socrates, Spinoza and Darwin. Religious ceremonies took place within the Nobels’ Factory Compound. Sometimes they would go on for days and the workers were free from work. Various religions were acknowledged, their traditions respected.
Due to the richest oil reserves of Absheron, their wealth grew, and by the end of the century the Nobel Brothers Partnership had reached the maximum share in Russian exports, and oil production in the corporation’s fields accounted for 9 percent of world output.
The Nobels built the first railroad railway line (called the “cuckoo” by the people), which also reduced the cost of oil transportation. The Nobels were the first of the oil companies to transport oil in bulk. The corporation built its own bulk fleet, which significantly accelerated and simplified the delivery of oil to Russia, Iran, and Turkestan.
At the beginning of the century, the Absheron Peninsula attracted the attention of millionaires engaged in the fishing. The Nobel brothers rent the Holy Island ("Pirallah"), and in 1904 discovered a rich oil field. In a short time, the small fishing town became an industrial town.
From the ancient times on the Pirallahi, oil was extracted from small cliffs, hand drilled holes, by means of valves and buckles. The island is called "Pirallahi" because the temple of the firefighters is also located here in Ateshgah and Pir.
The corporation spared no expense in improving the oil production technology, its distillation and transportation, as well as the improvement of settlements for the workers and employees of the company. To date, thousands of oil workers live in the working town of the Nobels in Sabunchi. In Balakhani and in the Black City, the corporation opened two schools for 50 students each with a permanent teaching staff. And for the senior employees of the company in the 80s in the "White City" corporation laid a park with magnificent houses. This green oasis grew in the midst of smoking factories. The workers of the Nobel Brothers’ Partnership were the most highly paid in Absheron, they had a special cash desk for medical care, as well as emergency rooms with the medical staff. In 1904, on one of the leased islands (Pirallahi), the corporation discovered a large oil field. In a short time, "The Partnership of Nobel Brothers" turned the small fishing village into an industrial town. But despite the fact that the Nobel corporation grew into the largest concern, it could not monopolize the Azerbaijani oil industry. In fair competition, representatives of local capital also increased. Due to the joint actions of Haji Tagiyev, Asadullayev, Nagiyev, Mukhtarov, Useinov and others, a number of organizations were created such as Baku Standard, Union of Baku Kerosene Plants, and others that opposed foreign corporations.
In 1907, four of the Swedes who worked for the Nobel company were murdered. Anders Tauson, Gustaf Adolf Packendorff and two others by the names of Lotberg and Anderson were killed. It's thought that Tauson, head of the Mechanical Workshop in Baku, may have been targeted because he had refused to give the workers piecework, which possibly would have increased their pay. After this incident, some other foreigners opted to leave Baku, fearing for their own safety. By 1918, the Nobel family had partly fled to Stockholm, having lost all of their Russian assets to the Bolsheviks. As they had no more oil for their European partners, they sold the companies that they still owned in Europe. The Red Army entered Baku in April 1920. A few months later, during the Great Depression, half of the Nobel's oil company shares were sold to Standard Oil in New Jersey, a masterstroke negotiated in New York by Gösta Nobel, Ludvig's youngest son. And the family's economic future was secured.