CHAPTER II

THE OIL-FIELDS OF THE WORLD

Ever since petroleum and its products entered the realm of commercial

commodities, there has been a ceaseless search throughout the two

hemispheres for crude oil, and to-day there are comparatively few

countries in the world where the presence of petroleum has not been

proved. The ever-expanding uses of petroleum, which in their train

have called for a continually increasing demand for crude oil, have

given an impetus to the search for commercially productive oil-fields,

which, in mining history, has no parallel. On the one hand, we have

those important oil-producing regions which embrace enormous regions of

the United States, Mexico, Russia, Roumania, the Dutch Indies, India,

and Galicia; on the other, we find comparatively recent enterprise

which is bringing into prominence the newer oil-producing regions of

Egypt, Trinidad, Canada, the Argentine, Algeria, and various parts

of Australia and Japan, though in several of these latter mentioned

countries, the production of petroleum has been carried on by private

means for not only many years, but even for centuries.

It naturally follows that, with the constant withdrawal of large

supplies of crude oil from Mother Earth, Nature’s stores must be

growing less, and it is not surprising, therefore, to hear, with

persistent regularity, alarming rumours of the coming dearth of crude

oil. Experts have devoted considerable time and thought in an endeavour

to arrive at a conclusion as to the length of time it will take for the

withdrawal of practically the whole of the crude oil from the known

deposits in the more developed fields: their conclusions, however, are

widely different, for while some assert that in the United States, for

instance, the known fields will cease to be commercially productive

within forty years, others there are who declare that centuries must

elapse before the question of a failing supply need call for serious

consideration.

But there is one point which must not be overlooked in this connection,

and that is the fact that, while thus far very few thoroughly developed

oil-fields have shown signs of permanent decay, there are numerous

others which, while having already furnished conclusive proof of their

productivity, have, for the most part, been but slightly developed.

Each passing year registers the incoming of fresh oil-producing areas,

while numerous regions in practically every part of the world, giving

much promise of the success of ultimate oil developments, are as yet

virgin territory.

The cry of possible shortage of supply was, fortunately, made at the

opportune moment: it was a word of warning, and was taken to heart

especially by those associated with the development of the older

producing oil-fields. In these fields--whether we look to America or

Russia--there has always been considerable waste of crude oil, mostly

in regard to furnishing power for oil-field operations, while the

natural gases which exude from the wells themselves, and to which

reference is made in another chapter, have, in times past, been

allowed to pass uncontrolled into the atmosphere. To-day, however,

we see conservation in every direction--thanks to the application

of scientific and engineering knowledge, combined with the exercise

of care--and there is no doubt that this new factor will tend in a

greater degree than may at first be imagined toward the preservation of

Nature’s stores of crude oil for unlimited time.

With these few general remarks, let us proceed to briefly survey the

principal oil-fields of the world, leaving those which are in the

process of development or exploitation to later consideration.

THE UNITED STATES.--In no other country has such continuous progress

been recorded in connection with the production of petroleum as in

the case of the United States. Quite recently, the U.S. Geological

Survey estimated that there are no less than 9,000 square miles of

oil-bearing territory in the States, yet the petroleum industry was

not commercially established until the early sixties of the last

century. It was in Pennsylvania that the industry had its birth,

and the troubles which beset Drake, the pioneer, have filled many

pages of early oil literature. His first well, which produced quite

a modest yield of crude oil, was at Titusville, Pa., which spot soon

became a thriving town. And as Pennsylvania was the scene of the early

successes, it also became the pivot round which the petroleum industry

of the States prospered for many years. Until 1885, the Pennsylvanian

fields furnished over 98 per cent. of the production of crude oil: then

a gradual decline set in, until, at the present time, Pennsylvanian

regions do not produce 10 per cent. of the oil output of the United

States. No sooner had the petroleum industry been firmly established in

Pennsylvania than an active search was made for the precious fluid in

various parts of the States, and one by one new oil regions were opened

up, but it is interesting to recall the fact that, even in the first

developed oil-producing region, no district has been entirely abandoned

as exhausted of oil, for to-day wells are being pumped quite close to

Drake’s first well and the scene of the birth of the American petroleum

industry. In the zenith of its prosperity, the Pennsylvanian field

produced nearly 5,000,000 tons of crude oil per annum, but to-day the

output has fallen off nearly 40 per cent.

When it is mentioned that the output of crude petroleum from the

various fields of the United States last year was over 40,000,000 tons,

the magnitude of America’s oil industry will at once be apparent.

The regions known as the Mid-Continent fields--and which embrace the

extensive oil-producing regions of Kansas and Oklahoma--are responsible

for a very large portion of this output. Each field has its various

“pools,” the most famous of this part, perhaps, being the Cushing pool,

which came into prominence but a few years ago. Toward the end of 1914,

it was estimated that the daily output of Cushing was 35,000 tons of

crude oil. Cushing, like all other prolific oil districts, has many

interesting stories associated with its rapid rise as an oil-producing

centre, and there are instances on record where, in the course of a few

days, land values have increased tenfold.

The rise of the Californian fields, too, is an example of the rapidity

with which oil regions can be developed. California’s output in 1919

was, roughly, 120,000,000 barrels of crude oil, or over 14,000,000

tons. It possesses nearly 900 square miles of oil-lands, and though at

one time a great difficulty was experienced in disposing of the crude

oil production, since it was of a somewhat low grade, the position has

now been reversed, and the consumption of petroleum products is greater

than the supply. With the improvement of the methods of drilling, and

the debut of the rotary system, it has been possible not only to drill

to much greater depths, but to considerably reduce the time requisite

for drilling a well to the oil sands. Californian records for quick

drilling with the rotary machine show that wells have been got down

to the producing sands, in some fields nearly 4,000 feet below the

surface, within one month. This deep drilling policy, which is now

much in vogue among Californian oil operators, has proved the existence

at the greater depth of larger volume of oil of far better quality

than that met with in the shallow strata, and it is to the discovery

and consequent development of the deeper oil horizons that much of

California’s recent advance is due.

Though but of small significance, the oil-wells in Summerland, Cal.,

call for mention for the reason that these are drilled in the sea at

quite a distance from the coast. The encroachment of sea-water to the

wells themselves is prevented by the continuance of the tubes in the

wells to a height above the level of high-water mark, the produced oil

being piped to the mainland.

There is no doubt that a wonderful future awaits California in regard

to its oil export trade. The Far East is largely drawing upon the

State for crude oil for treatment in the Far Eastern refineries: the

oil-burning vessels of the Pacific rely upon Californian fuel oil

for their supplies, while the opening of the Panama Canal, and the

establishment of oil storage depots there, has brought California

within easy transport distance of the European markets. During the past

few years several cargoes of Californian refined oil have, in fact,

come upon the English market.

The oil-fields of Texas have, perhaps, witnessed more “boom” periods

than any other oil regions of the States. The Gulf coastal fields which

embrace Texas and Louisiana, came into prominence some seventeen years

ago, and they were not long in recording an output of over 5,000,000

tons in a single twelve months. The prolific districts of Spindle Top,

Sour Lake, Humble, etc., attracted rapid attention, and the speculator

in oil lands became immensely rich. But these boom periods cannot be

said to be of much real value to the oil industry, for they are

always followed by times of depression, when fortunes are lost almost

as quickly as they have been made. To-day, the Gulf coast fields have

settled down to a period of steady expansion; systematic development is

taking place in every field, and, as in California, the policy of deep

drilling has been eminently successful.

[Illustration: THE GLEN POOL--ONE OF AMERICA’S OIL PRODUCING CENTRES]

Space forbids my entering into details respecting the more recently

developed or partially exploited fields of America, but it is safe to

say that there is scarcely a single State that does not hold out hope

for profitable oil development: this is evidenced by the large amounts

of new capital which are to-day finding employment in regions which are

only commencing their oil-field history.

There is no other oil-producing country in the world where the

petroleum industry has reached such a highly organized state as in

the United States. Each producing field is connected by means of

underground pipe-lines with the trunk pipe-line system, by which it

is possible to pump oil from the most distant fields direct to the

Atlantic seaboard. Some of the principal lines are hundreds of miles

in length. In another chapter I deal with this wonderful system of oil

transportation: it is, therefore, unnecessary here to more than mention

it _en passant_. The oil-refining branch of the American petroleum

industry is also particularly well organized and up to date, but with

this subject, too, I deal at length elsewhere.

[Illustration: A TYPICAL GEOLOGICAL SECTION SHOWING THE OIL SANDS]

MEXICO.--The oil-fields of Mexico can claim to have leapt into

prominence at a far more rapid rate than any other oil-field of

importance in the world. Their development has been phenomenal, and

from being practically unknown sixteen years ago, they now rank as

the third largest producing regions, coming but next to the United

States and Russia. My object in dealing with the Mexican fields prior

to referring to the Russian petroleum industry is that they may be said

to form an integral part of the fields of the New Continent, and, from

many points of view, are linked up with the petroleum industry of the

United States. Indeed, there are several authorities who are now urging

that it is to Mexico that the United States Government must look if it

is to be in a position to furnish the major portion of the petroleum

products required for the markets of the world. Another reason for my

dealing with Mexico at the moment is that, when development operations

are carried a little further, and when ocean transport facilities are

available for adequately dealing with the flood of Mexican petroleum,

there is not the slightest doubt that Mexico will rank as the second

largest country of petroleum production. Its annual output of crude

oil is, approximately, 8,000,000 tons, but even this figure in no way

represents the productivity of its prolific oil-producing regions,

for according to the official statement of the Mexican Government the

production in 1918 represented only 10 per cent. of that possible. The

Mexican wells have no parallel in the world, large as have been some of

the oil-fountains in Russia.

It will be of great interest here to refer briefly to these, and though

it would be impossible to detail all those Mexican wells which have

ranked quite outside the limits of ordinary producers, I will touch

only upon two of these remarkable oil gushers. They both were drilled

on the properties owned by the well-known English firm of Pearsons, the

operating company being the “Aguila” (Mexican Eagle) Company. It was in

1906 when the Company commenced active drilling operations in Northern

Vera Cruz, and though these were very successful from the start, it

was two years later that the famous “Dos Bocas” well came in. A heavy

gas pressure developed when the rotary drill was down just over 1,800

feet, and in a few minutes the internal pressure manifested itself by

bursting the wire-wrapped hose connected with the drilling apparatus.

The oil then commenced to come to the surface in an immense stream, and

in twenty minutes the well was beyond control. Fissures began to appear

in the ground at considerable distance from the well, and through

these came oil and gas. One of these fissures opened directly under

the boilers, and though the fires had been drawn, the gas ignited. The

position was well-nigh hopeless from the start, the well itself was

throwing out an 8-inch column of oil hundreds of feet in the air. The

force of the volume of oil below ground flung the heavy English drill

pipe out of the well, and soon it became impossible to approach within

300 feet of the “mad gusher.” The flames of fire are said to have

reached 1,000 feet in height, and inasmuch as all ground round the well

had fallen into the cavity caused, they were over 50 feet in diameter.

And for 58 days did this gusher burn with all the fury imaginable, its

glare being seen far out at sea. Anything approaching an approximate

production of oil from this well will never be made: it can safely be

recorded, however, that its mad flow of oil ran into many millions of

barrels, and it is placed on record that nearly 2,000,000 tons of solid

earth were carried away by the force of the oil from the well’s mouth,

for a crater of nearly 120,000 square metres was formed round the well.

[Illustration: A GUSHER OF THE MEXICAN EAGLE CO. UNDER CONTROL--A DOME

BUILT OVER THE MOUTH]

Toward the end of 1910 another surprise was in store for those in

charge of drilling operations for the Company, for it was then that the

world famous “Protero del Llano” gusher came in. This well ranks as one

of the largest, if not the largest, ever associated with the petroleum

industry. Its estimated daily flow was over 125,000 barrels, and within

three months the well had produced over 8,000,000 barrels of crude oil.

During November, 1919, a new field at Naranjos was developed by the

Mexican Eagle Co., and the first three wells to come into production,

commenced to yield over 30,000 tons daily.

It says much for the enterprise of the Pearson (Lord Cowdray) interests

that they have been able to build up such a remarkable business in

Mexico’s oil industry in so comparatively a short space of time. The

production of crude oil, as everyone knows, is but the first link in

a long chain of commercial oil operations. To-day, the Mexican Eagle

Oil Company owns considerably over 250 miles of pipe-line (mostly

of 8-inch capacity), possess several miniature railways, and on the

fields of production has bulk oil storage accommodation for several

million barrels of crude oil. It has also two large refineries--one

at Minatitlan and another at Tampico, which together are capable of

handling over 5,000 tons (about 35,000 barrels) of crude oil daily, and

turning the same into a complete range of high-grade products--motor

spirit, illuminating oils, lubricants, fuel oil, paraffin wax, and an

asphalt for road-making.

An interesting equipment of this Company in Mexico is that of its

sea-loading pipe-lines at Tuxpam. Here, the water inside the bar is

too shallow to allow the gigantic bulk oil-carriers of the Company’s

associated concern--the Eagle Oil Transport Company, Ltd.--to come

alongside and load. Pipe-lines have accordingly been laid on the

bed of the sea reaching out to a loading terminal a mile and a half

out at sea. Here, the pipe-lines are connected with the steamers by

means of flexible hose, and three or four tank vessels can be loaded

simultaneously from the storage tanks on shore. In one recent twelve

months alone over 200 oil tankers were so loaded in this way, and on

the average, each was loaded and dispatched within 2½ days, for the

pipe-line facilities permit of 10,000 tons of oil being pumped into the

vessel’s tanks every 24 hours.

[Illustration: INSIDE THE DERRICK OF AN AMERICAN OIL WELL]

There are several large amalgamations of capital interested in the

development of the Mexican fields--American and English, while, prior

to the war, the Germans had anxious eyes upon this growing industry,

and even formulated plans whereby German interests would be largely

represented in its future.

While on the subject of the Mexican fields, might I say that no other

oil-producing regions have, in the short space of time during which

developments have taken place, exercised such an influence upon the

international oil situation as has Mexico. This may be traced to the

fact that Mexican oil is an admirable liquid fuel, and as such is now

in regular use the world over. The vast consuming centres in the South

American Continent have seen that, whereas coal is very dear, it is

possible to secure almost unlimited supplies of Mexican fuel oil almost

at their own doors, while overseas, consequent upon the advent of the

fuel oil age, Mexican fuel oil is playing a most important part, and

to-day is in great demand for the mercantile fleet.

RUSSIA.--Long before the commercial value of petroleum and its products

was established, Baku--the present centre of the Russian petroleum

industry--had become famous for its “Eternal Fires,” and it was to

that place the Parsees made pilgrimages for over 1,000 years; in fact,

centuries before the Russians occupied the Caucasus, the tribes of

Persia eagerly sought the oils of Baku for their curative qualities.

The Russian oil-fields have an output of, approximately, 10,000,000

tons annually, or, roughly, 15 per cent. of the world’s total

production of crude oil. Since the time when the petroleum industry

was placed upon a commercial footing, the Russian fields have produced

230,000,000 tons of petroleum. Enormous though this quantity is, it

has been more than doubled by the United States.

The oil-fields of Baku have gained a distinction for the reason that

numerous individual wells have given forth a flood of crude oil which

has, with very few exceptions, been unknown in other petroliferous

regions. The Baku fields proper embrace the districts of Balakhany,

Saboontchi, Romany, and Bibi Eibat: the first three districts stand on

a plateau but a few miles from Baku, while Bibi Eibat is located quite

near the Caspian Sea, on a bay from which the field takes its name.

One remarkable feature of these fields--as showing their prolific oil

content--is that the four main oil-producing districts in Baku have an

area of less than 4,000 acres. It is in this locality that the Russian

petroleum industry, having had its birth, became centred, and though

it is known that there are several really promising oil areas in this

south-western part of the Caucasus, the fact that the lands belong to

the State has been a sufficient stumbling-block to development in the

past.

Apart from the Baku fields, the most highly developed oil-field

of importance in Russia is that of Grosny, which is situated on

the northern slopes of the Caucasian range and connected with the

Vladicaucas railway by a branch line. The Grosny field, however, has

only been developed during the past fifteen years in what may be called

a commercial sense, but its operated area is almost double that of

Baku. It has greatly suffered owing to the inadequacy of transport

facilities, but in 1919 a project was drafted to build a pipe-line to

the Black Sea.

It is not a feature of this little publication that minor regions

shall be all enumerated, and thus I may be forgiven if I refer but

to one of the several new districts which have recently attracted

the attention of both oil operators and speculators. I refer to the

Maikop fields, which prominently came before the British investing

public in 1910, and which were directly responsible for the oil boom

of that year. A few months before, a very prolific spouter of oil had

been struck in Maikop, which was then quite an agricultural centre,

and enormous excitement followed. Land was quickly taken over at

ever-increasing prices, and the boom, for which English capital was

largely responsible, lasted for several months. There have been many

opinions put forward by supposed experts in oil geology for and against

the Maikop oil region, but the kindest thing of all that can be said

for the district is that, while there was really no justification

for the remarkable Maikop oil boom of 1910, there was certainly no

reason why public opinion should so rapidly change in regard to its

potentialities. I have every reason to believe that some day Maikop

will justify the optimistic opinions held for it during the boom, but

in the eyes of the English investor the region bears the stamp of

fraud, for the simple reason that so many have invested their savings

in it, and have been doomed to acute disappointment.

Some millions of English money went into Maikop oil enterprises during

that ill-fated oil boom, but a very small percentage of this went to

really prove the contents of the lower strata. The fact that the ground

was simply “scratched” and condemned because it did not respond with

oil fountains, cannot in the slightest affect the ultimate career of

the Maikop oil region, the presence of oil in which has been known

even from ancient times. Looking back upon that Maikop oil boom, one

cannot but express surprise at our gullibility generally: we stake our

faith and our capital upon what at the best is a sheer gamble, and

we seem content if we find that anything approaching 20 per cent. of

the money subscribed actually goes into the serious development of the

scheme which we fancied. There are a few who grow suddenly rich upon

the spoils of such oil booms--I know some of these personally, and to

me it has always been a source of keen regret that the State does not

exercise something of a rigid control over these publicly invested

funds. I cannot here refrain, while on the subject of the Maikop oil

boom, just making a remark as to the overrated value which the public

generally attach to the reports of many gentlemen looked upon as oil

experts. Some remarkable stories are associated with the locking up

(and loss) of English moneys in the Maikop boom, but the strangest

I know is of a Russian who came to England when the boom was at its

height, for the purpose of selling a number of Maikop oil claims.

There were many prospective buyers, but it was necessary to possess a

report from some supposed “oil expert.” To save time, the seller of the

claims drafted what he considered quite an alluring statement, and the

next day the report, couched in the same language, bore the “expert’s”

signature. And the “wheeze” worked.

But to return to the main subject. Prior to 1870, the crude petroleum

in the Baku district, as well as in the minor fields of Russia, was

obtained from surface pits, dug by hand, and rarely more than 50

feet deep, and the production was carried away from the mouth of the

shaft in leathern bottles. The general arrangements were on the most

primitive lines, but, nevertheless, the industry--such as it was

then--thrived. Even to-day in several fields in Russia we see the

survival of the hand-dug wells, but they are steadily becoming a

feature of a page of oil-field history which is almost filled.

It was in 1873 that Robert Nobel went to Baku, and to his enterprise

and technical genius a great deal of the subsequent rapid development

of the Russian industry is due. Boring by steam power was introduced,

and the deeper oil horizons were reached, but, owing to the depth at

which the strata became commercially productive, it was necessary to

commence the well with a starting diameter of 36-40 inches, so as to

ensure the requisite depth being obtained with a workable size of

baler--for the Baku crude oils are “baled” from the wells. Upon the

question of baling wells, I shall have something to say in another

chapter.

Under the improved conditions which were introduced in methods of

boring and operating the oil-wells, the industry steadily expanded,

the general awakening of boring enterprise being best reflected in the

number of oil-wells in operation in subsequent years. For instance,

in 1893, the Baku fields could boast of but 458 bore-holes; in 1898,

the number had increased to 1,107; in 1903, it was about 2,000; while

in 1911, there were over 3,000 bore-holes in the Baku fields. There

has been a steady decline in the number of these bore-holes since

1914 due in some part, I assume, to the difficulties of securing the

requisite materials for new boring, combined with the enormous increase

in the cost of the same. The drilling of the wells in Russia is a very

expensive item, for they cost from anything over £10,000 up to £15,000,

and usually take a couple of years to drill. But when they are down

to the producing strata and commence production, it can be taken for

granted that they will continue, providing ordinary care is taken of

the well itself, for many years to profitably produce.

The Russian petroleum industry is in the hands of a large number of

operating firms, the majority of which work quite independently of

each other, and these independent firms are responsible for more than

one-half of the total output. The other production of the crude oil,

representing certainly over 40 per cent., is in the hands of combines

representing the large and middle-class firms, prominent among which

we get the firm of Messrs. Nobel Brothers, the “Shell” group, and the

General Russian Corporation.

The refining of the crude oil is carried out in Baku, the portion of

the town in which this operation takes place being known as Blacktown.

It does not belie its name either. At one time these refineries, or at

least many of them, were erected in the centre of the town of Baku, or

near it, and made it almost uninhabitable by their smoke, smell, and

refuse, the latter flowing into the streets and the harbour. A special

district was therefore selected, to which all had to remove, and it is

this portion of the town which forms “Blacktown” to-day.

One of the great difficulties of the Russian refining industry in its

commencement was due to the fact that sulphuric acid, so absolute a

necessity in petroleum refining, had to be brought from Europe at great

expense, but in 1883, Messrs. Nobel built a factory for its production

on the spot from Caucasian pyrites, mined in the neighbourhood of

Alexandropol. Other factories for the same purpose and for the

regeneration of the acids have since that time been established.

As in other great industries, so in regard to the methods by which the

Russian crude oil is transported and to-day handled, great strides

forward have been made since the early days. Then the whole of the

prevailing conditions were primitive: crude oil, for instance, was

carried from the Baku wells to the refineries in skins and barrels

loaded on carts or camels. Messrs. Nobel Brothers were the first to

lay a pipe-line to their factory, but later on pipes were laid between

the refineries and the harbour, these obvious improvements meeting

with fierce resistance on the part of the workpeople. The transport of

the refined products from Baku to the consumers was equally difficult.

There was then no railway from Baku to Tiflis, and the only way to

the Black Sea was thus effectively shut off. On the other hand, the

navigation of the Volga was only possible during six months of the

year, while the monopoly of water transport on the Caspian Sea imposed

high rates on all Baku petroleum products.

Improvements were again due to the enterprise of Messrs. Nobel

Brothers, who built the first cistern waggons for transporting oil on

the railways, instead of using the old wooden barrels, which were far

from satisfactory. In order, too, to open an outlet on the Black Sea,

the same firm, in 1889, constructed a pipe-line from Mikhailovo to

Kvirili, over the Suram mountains. Now, of course, we have the great

pipe-line running from Baku to Batoum, a distance of nearly 560 miles,

and which is responsible for the transport of the quantities of Russian

oil exported.

But the Russian petroleum industry has always existed more or less

under a cloud. The old regime of Government did not attempt to foster

and encourage the industry from which it received so much yearly in

royalties, for it must be recollected that the Russian State was the

chief gainer by the exploitation of the Baku oil lands, owing to the

prevalence of the system of royalties. It seemed to be content to

leave the industry to its fate, so long as it received therefrom so

substantial a sum in royalties, etc. Instances are on record where

operating firms pay the Government 40 per cent., or even more, of

their crude oil production as royalties--payment for the privilege of

taking the oil from the ground. Such conditions have been relentlessly

imposed, and it is not surprising to find that, operating under this

burden of expense, numerous firms find it quite out of the question

to earn profits for their shareholders. Several English enterprises

come into this category, but the fault is not of their seeking; it is,

however, to be regretted, for once an equitable system of payments

is arranged, the Russian petroleum industry will expand in a healthy

manner, and become a much greater source of revenue to the State than

it is at present.

But, apart from the troubles which have to be faced by the Baku oil

producers, and which we may call Governmental, the relation between the

employers and workpeople is far from being friendly. To-day, of course,

it is worse than it was under the old regime of the Tzar, and then it

was bad enough. The oil-field workman in Russia is the incarnation

of all that is unsatisfactory. He works when he thinks he will, he

labours under grievances, many of which are purely imaginary, and then

he ventilates his spite upon his masters. The pages of history tell

of many a conflict between capital and labour in the Baku oil-fields,

with the consequent burning of all that would take fire on the fields,

and the damaging of the producing wells by the workpeople. Instances

are placed on record where, in a single night, dozens of productive

oil-wells, which have taken years to bring into production, have been

irreparably damaged by these oil-field workers. Their life, admitted,

is nothing to write books upon, and their environments are in some

cases of the worst description, rendered no better by the natural

aptitude of the people themselves. But their views upon labour are of

the most Utopian imaginable. During recent years, there has been a sort

of combination between these operatives, whose socialistic tendencies

run high, and less than two years ago they collectively put before the

managers of the oil-fields the conditions under which they would in

future work. There were nearly 100 different claims detailed, and a few

of these are worthy of mention, as showing the appreciation of fairness

which is instilled in the mind of the Russian oil-field worker. In the

first place, a 50 per cent. increase in wages was desired, this to be

retrospective. Holidays had to be paid for by the masters, and when the

worker went on strike he had to receive his full pay from the master

until such strike was settled. Then the workmen had to be represented

on the board of management of the companies, their houses had to be

improved by the masters, free railway and tramway accommodation had to

be provided, etc. Generally, the demands put forward were distinctly

arbitrary, though in many cases very humorous.

Recent events in the conduct of affairs in Russia do not suggest that

great improvements may be expected in the near future, either in

regard to the attitude of the Government toward the Russian petroleum

industry, or to the attitude of the workers to those responsible

for oil-field operations. Even before the European War, the Russian

petroleum industry was rather on the decline. The only hope that can

be expressed at this juncture is that when Russia possesses a stable

government, and the country enters upon a period of peaceful progress,

the Mining Department will take care that Russia takes its proper

position as one of the most important oil-producing countries in the

world. But before this comes about, there will have to be a complete

revision of the Government’s policy respecting oil royalties. The

destruction, however, wrought in Baku towards the end of 1918 will take

several years to make good.

[Illustration: ROUMANIA: A FEW OF THE HAND DUG WELLS IN BUSTENARI]

ROUMANIA.--During comparatively recent time, Roumania has come

prominently forward as one of the large petroleum-producing countries

of the world, and its yearly output of crude oil, according to latest

returns, is about 11,000,000 barrels, or, say, 1,600,000 tons. The

production of petroleum in the country, however, has been proceeding

for centuries, for, in the seventeenth century, the peasants were

in the habit of digging wells by hand and selling the crude oil for

medicinal purposes, the greasing of cart-wheels, as well as for

lighting. There are many places in Roumania which are named from

petroleum, a fact which points to the existence of the industry long

before the present-day methods of extraction were thought of. Several

hundreds of these hand-dug wells still exist round the fringe of the

Transylvanian and Carpathian Alps, and though many of them have now

fallen into decay, there are numerous others from which a payable

quantity of petroleum is extracted by primitive methods.

The hand-dug wells in Roumania are highly interesting relics of a

period which is now relegated to the past, though so long as the

Roumanian petroleum industry exists, so long will the old hand-dug

wells be associated with it. These wells are about 5 feet in diameter,

and are sunk through alternate layers of clay, schisty clay, sandy

clay, sandstone, and petroliferous sand to the more shallow oil

horizons. They are dug by workmen who descend dressed with the minimum

of clothing, usually saturated with oil, and wearing a tin hat to

protect the head from falling stones, etc. The sides of the wells

are lined with impermeable clay, which is protected by wicker-work.

The man is lowered by a rope, air being supplied to him by means of

bellows. At some places the rotary fan was employed more recently,

but somehow it frequently happened that it was operated in the wrong

direction, and the unfortunate digger was asphyxiated. These old wells

have a depth of about 450 feet, and though their yield of oil is not

considerable, it has for many years been a paying proposition to those

engaged in this primitive method of petroleum production. The excavated

earth, when digging these wells, was brought to the surface in buckets,

lowered and raised by means of either manual labour or horse traction.

When the first oil source was reached and the extraction of the crude

oil commenced, this was accomplished by means of the use of wooden

buckets or leather skins, one being lowered empty while the other was

raised full. By this means it was possible to raise as much as 20

tons of the oil per day--quite a considerable amount, considering the

primitive means adopted.

Mechanical developments throughout the Roumanian oil-fields on a

more or less serious scale began about 1898, as the result of the

introduction of foreign capital, and, from that time to the present,

the history of the Roumanian petroleum industry has been one steady

period of continued expansion. Various systems of drilling have been

introduced into the work of developing old fields or opening up new

centres, but in regard to these I shall deal at length in another

chapter. The advent of the rotary method of drilling, however, opened

up a new era for expansion in 1912, and since that time Roumania has

made more marked progress than at any time previously.

The Roumanian oil-fields, as at present defined, cover a region roughly

20 miles in width, and extend to a length of between 300 and 400

miles, with, of course, numerous breaks. Of the numerous petroliferous

regions in Roumania, those of Campina-Bustenari, Gura-Ocnitza, Moreni,

and Baicoi-Tzintea among them provide about 95 per cent. of the total

production, and, with the one exception of the Moreni field, all have

been previously exploited by hand-dug wells.

The prosperity of the Roumanian industry has been directly the result

of the influx of foreign capital, and the majority of the 550,000,000

francs employed in it, is mostly made up of British, American, and

German capital. The principal English Company in the fields is the

Roumanian Consolidated Oil-fields, Ltd., which concern, with its

capital of one and three-quarter millions sterling, represents an

amalgamation of many small companies.

Space forbids my referring at length to the momentous happenings in

the Roumanian fields towards the end of 1916, but they will ever

form one of the most interesting--and at the same time the most

tragic--incidents associated with Roumania’s petroleum industry. At

that time, the German armies were pushing their way toward Roumania,

and, in fact, having crossed the border, were marching on for

possession not merely of territorial gains, but in order to secure

themselves of large quantities of petroleum products by capturing the

prolific oil-fields of the country. It was at that critical time that

the British Government sent out its Military Mission, headed by Colonel

(now Sir) John Norton Griffiths, completely to destroy all that was

valuable in connection with the oil-fields, the refineries, and the

installations. One night the Mission arrived at the offices of the

Roumanian Consolidated Oil-fields, Ltd., and made its plan of campaign

clear. There was nothing to be done but to fall in with it, and the

following morning practically everything was destroyed, or rather, a

start was made to destroy it. And the destruction was carried out in a

complete manner, for not only one, but several concerns which had been

steadily built up to perfection as the result of many years of careful

and systematic expansion, were all wiped out, excepting in name. The

oil-wells were plugged beyond all hope of repair, the refineries were

dismantled, machinery broken, pipe-line connections damaged, and both

crude and refined oil stocks burned. It was the most tragic proceeding

ever recorded in oil-field history, but it was necessary, and not

carried out one day too soon, for the incoming armies were dangerously

near.

[Illustration: BUSTENARI--ROUMANIA’S FAMOUS OIL REGION]

The Germans lost no time in making good a great deal of the damage to

the fields, and at the time of the armistice it was stated that the

crude oil output of Roumania was up to 80 per cent. of its pre-war

level.

Now that the various allied interests are again operating in the

Roumanian fields, considerable expansion of the country’s petroleum

industry is being planned, though the pre-war German interests therein

are now taken over by the Allies.

During the past decade Roumania has necessarily catered for the export

trade, for the volume of crude oil produced has been far beyond its

requirements. The great petroleum storage port of Constantza has been

made the centre for this export business, and the completion of a trunk

pipe-line from the Roumanian refineries to the port was one of the

most recent enterprises undertaken by the Roumanian Government prior

to the war. During the period when Roumania was under German control

its terminal point was so changed that the line ran to a spot which

rendered the transport of petroleum to Germany a matter of ease. Now,

however, Germany’s plans have been frustrated, and Roumania’s great

pipe-line will have its terminal point at Constantza, where all kinds

of petroleum products can be pumped direct to the oil tankers.

THE DUTCH INDIES.--The growth of the petroleum industry in the Dutch

Indies has been surprisingly rapid, and this growth synchronizes with

the advent of the “Shell” Company into the Far Eastern fields. It is

stated that there are many hundreds of square miles of territory in

the East Indian Islands which can be remuneratively developed; at

the moment, however, though but the fringe of exploitation has been

touched, the production has been amazing. Eighteen years ago, it was

placed at 300,000 tons of crude oil; last year it nearly reached

2,000,000 tons. In Sumatra several companies successfully operated

for many years, but most of them eventually became merged with the

Royal Dutch Company, whose interests now are also those of the

“Shell” Company. As to Borneo, the “Shell” Company commenced active

developments in 1900, or thereabouts, for it had acquired an area of

approximately 460 square miles. The fields rapidly responded to the

drill, and the crude oil production rose by leaps and bounds. The

crude was of a high-grade character, and for a long time it taxed the

energies of those responsible for the good conduct of the concern,

as to exactly what should be done with some of the refined products.

As a matter of fact, some thousands of tons were burned, for at that

time there was little or no demand for motor spirit. I well remember

when the Company’s Chairman--Sir Marcus Samuel--faced the shareholders

in 1900 and explained that if only the Company could realize 6d. per

gallon for its motor spirit, what handsome profits would accrue. But

events have marched quickly since those days. The motor-car has come

to stay, and what seemed a useless product of the Far Eastern oils

in the early days of development, is now one of the chief sources of

revenue. The advent of the heavier motor spirits has also been of great

benefit to the Borneo petroleum industry, for the public has grown

accustomed to recognize that it is not specific gravity which counts in

the quality of motor spirit, but the closeness of the boiling points

of its constituent fractions. To-day, the Far Eastern fields supply

enormous quantities of refined products to the consuming markets of

the Eastern hemisphere, and so long as the supplying centres continue

their present productivity, there need be no talk of approaching

famine, for, if necessary--providing facilities permitted--these

regions could materially increase their present output of petroleum

products.

[Illustration: OIL PRODUCTION IN THE EARLY DAYS OF THE INDUSTRY IN

BURMAH]

INDIA also ranks to-day as a very important petroleum producing

region, the fields of Upper Burmah--in which the Burmah Oil Company

operates--being responsible for practically the whole production. In

another part of this little publication, I deal briefly with this

Company’s operations, so, for the moment, it is sufficient to mention

that, though to-day they produce large quantities of petroleum, there

are several new districts which show much promise of new production.

For many years the Upper Burmah fields were exploited by means of very

shallow wells: it was only when the deeper strata were reached that the

potentialities of the region became fully manifest.

[Illustration: AN OLD JAPANESE WAY OF OPERATING THE WELLS]

JAPAN, as an oil-producing country, affords food for an interesting

story, for it was here that very early attempts were made to develop

production. Even in the seventh century, the Emperor was presented

with “burning water” with which the Palace was lighted. The crude

oil was collected from pools, or, alternately, wells were dug by

hand, the process of extraction being very picturesque, if very

primitive. To-day, Echigo is the centre of the industry, for which

the introduction of European methods of drilling have worked wonders

in regard to progress. The Celestials consume large quantities of

petroleum, especially for lighting purposes, and in spite of the now

considerable yields from the wells, a gigantic trade is regularly done

in imported oils, especially those of American origin, for which there

is a most up-to-date organization for distribution. The statement that

American petroleum products find their way to every quarter of the

globe is strangely exemplified in Japan (as also in China), where the

ubiquitous tin container for petroleum can be seen in the most isolated

parts.

[Illustration: THE GALICIAN FIELDS, SHOWING DAMAGE DONE BY THE RUSSIAN

ARMIES WHEN RETREATING IN 1916]

GALICIA.--Since the commencement of the period when petroleum and

its products assumed a degree of industrial importance, the Galician

oil regions have attracted considerable attention. The area of the

oil-fields extends over a length of 200 miles, and in width varies

from 40 to 60 miles, and though in this territory several fields of

considerable note have for many years been systematically developed,

there is enormous scope for future operations. Its annual output of

crude oil, which nearly reached 1,900,000 tons in 1909, is in itself

suggestive of the extensive manner in which the oil-producing fields

have been developed during late years. The oil-field history of Galicia

is particularly interesting, for the oil seepages round Boryslaw have

been exploited for very many years. Long before the introduction

of the drilling methods of modern times, the shallow oil sources in

the Galician fields were tapped by means of the hand-dug wells, but

it was only when the first drilled well was sunk in 1862 that the

real value of the Galician ozokerite, which abounds in many places

in the oil-fields, was appreciated by the operators. This ozokerite

is one of the most valuable of bitumens, and though found in several

countries, is nowhere met with in such large quantities as in Galicia.

The ozokerite there fills the fissures in the much disturbed _cpaly_,

and evidently originates from a natural process of concentration. The

mines are operated by modern machinery, and the industry in Galicia

has reached a stage of great importance, some thousands of tons of

the mineral being yearly raised. The material is refined, and the

resulting wax serves numerous commercial purposes, the refining taking

place in the Austro-Hungarian refineries. Considerable quantities of

the raw material are exported to Germany and Russia, while the refined

products are well known on the export markets. About seven years ago,

serious water trouble materially reduced the production of the Galician

oil-wells (for when the water courses are not properly shut off,

water may encroach and cause the loss of the producing well), but the

trouble was to some extent surmounted by the taking of greater care in

cementing the wells. The introduction and consequent popularity of the

modern drilling methods which were introduced by Mr. W. H. Margarvey

in 1882 permitted the testing of the deeper horizons of the Galician

fields, and to-day wells are by no means uncommon with depths up to and

sometimes exceeding 4,000 feet. The Boryslaw-Tustanowice district still

continues to be the centre of the crude oil production, but several

new oil areas with great promise have been opened up during the past

six years. Naturally, the European War has retarded development work

considerably, and the Galician fields have on more than one occasion

been the scene of battle. At one time in 1915 they passed over to the

Russians, but when the Russian retreat occurred later from Lemberg,

considerable damage was done to the fields in order to prevent their

being of immediate use to the enemy. The wells were seriously damaged,

and the State refinery at Drohobitz was partially dismantled, while

immense reserves of refined oil stocks were burned.

The Galician oil industry has for years attracted the attention of

foreign capitalists, for the highly remunerative nature of petroleum

exploitation is generally appreciated. Prior to the European war

German capital was very largely interested in the Galician industry,

and the majority of Allied companies had Germans as their local

representatives, but all this is now changed, and in the future Allied

capital will be considerably increased. The Premier Company is the

largest English concern in the Galician fields.

GERMANY has made great endeavours in the past to institute a petroleum

industry of its own, but no great success has been recorded, for while

it does possess several oil-producing areas, these are only small

fields, with a very limited yield of heavy petroleums. The wells,

though producing for many years steadily, do not give forth those large

quantities of petroleum so characteristic of the best wells in other

petroleum-producing fields, and flowing wells are indeed very rare.

Germany, therefore, has to look to imported petroleum for its large

demands.

In a succeeding chapter I refer at length to those oil regions which

come within the limits of a chapter, “Petroleum in the British

Empire”: there is no need at the moment to make reference to them here.

Space does not permit my even briefly touching upon the many other oil

regions of the world which are now being successfully operated; it is

certain, however, as time goes on that their number will be materially

increased.

Petroleum · 第 2 / 14 章