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.