Incidentally, this was Russia’s first experience with the industrial use of natural gas. The gas burner was made of an iron pipe with small openings on the top. The combustion products passed through a canal to a chimney, heating a water-filled copper tub along the way. Water from the tub was poured into the kettle to keep the oil from overheating.
At the refinery, the light Surakhany oil yielded 83.9% lighting distillate, 12.5% residue, and 3.6% was lost to evaporation. The heavy Balakhany oil yielded only 10% distillation product and 85% residue, and 5% was lost.
As it turned out, Voskoboynikov’s Balakhany refinery was in operation for only a very short time: from November 1837 through August 1838. Over nine months, it produced more than 108 barrels of lamp oil, which was sent to Astrakhan. But since the oil distillation product did not initially undergo further chemical processing (refining), the petroleum acids present in the distillate caused corrosion of the walls of iron barrels when it was stored and transported, which in turn changed the product’s color and significantly degraded its combustion properties. The large production expenses and high cost of transportation of the finished product made the refinery unprofitable. The refinery’s numerous misfortunes also reflected the absence of Major Voskoboynikov, who was removed from his post without grounds and was under investigation after being denounced by adversaries.
The new director of the Absheron oil fields appointed by the Mining Department opted out of managing the oil distillation work, and by the beginning of 1839 the Balakhany refinery ceased to exist. However, the short-lived distillation work of the refinery was not in vain: the series of technical solutions devised by mining engineer Nikolay Voskoboynikov and put into practice at the refinery had a substantial influence on all subsequent developments in refining in Russia.
On Petroleum Quitrent
Along with the development of the fields on the Absheron Peninsula, signs of the emerging oil business also started to appear in the North Caucasus. One of the first to announce the presence of oil sources in the North Caucasus at the beginning of the 18th century was the Russian geographer and cartographer Ivan Kirillov (1689–1737). Author of the first systematic and economic geographical description of Russia, The Flourishing Condition of the Russian State [Tsvetushcheye sostoyaniye Vserossiyskogo gosudarstva] (1727), he reported that “between the small towns of Shadrino and Chervlenoe, on the other side of the Terek River, there are oil wells; however, there is no oil industry on them.”
Russian archives contain documents suggesting that Cossacks and local inhabitants collected and used oil from the Braguny and Chervlenoe wells. For example, the description of the archive of the Kizlyar commandant mentions two files: “Delivery of Oil on Cossack Kayuks” (1743) and “Release of Cossacks to the Chervlenoe Wells to Collect Petroleum” (1756).
Russian researcher Stepan Vonevin’s report of September 15, 1768 noted that: “It is possible to see the Braguny hot springs and the Chervlenoe hand-dug oil wells extending up to the edge of these mountain ranges, which begin almost from the mouth of the Sunzha River and bend to the west up along the Terek, almost parallel to it.”
In 1770, the St. Petersburg Academy of Sciences had this region explored by aide-de-camp Johann Anton Güldenstädt (1745–1781), who later became president of the Free Economic Society (VEO). In his book Reisen durch Russland [Travels through Russia], characterizing the territory located not far from the village of Mamakay-Yurt, he wrote: “Around 10 versts [6.6 miles] to the south of the Pavlovskay a greenhouse there is an oil spring... gushing out of the mountains lying opposite the greenhouse in two places at a distance of 100 paces; this so-called petroleum is a black, thick, and natural mineral oil, or mineral tar. In the first spring there is a little of this tar, and in the last two, several barrels of it are produced every year for lubricating wheels.”
At the beginning of the 19th century these oil-bearing areas were the property of Prince Turlov, and in 1811 the Mozdok Cossack Regiment took control of these oil wells under a tax-farming arrangement. However, after the Grozny fortress was built (1818) and the Caucasus Cossack Line Forces were formed, the oil sources came to be administered by its leaders, who started to lease the wells out to various entrepreneurs under a tax-farming arrangement. Crude oil was used instead of tar; distilled oil was sold to pharmacies as a medicine, for cleaning clothing, and for producing waterproof fabrics.
The beginning of the 1820s was marked by a significant event that became an important landmark in the history of the domestic oil business. For more than two decades, primary processing of oil had been carried out in the North Caucasus by the brothers Vasily, Gerasim, and Makar Dubinin, who were serfs of Countess Panina from the village of Nizhny Landekh, Gorokhovets District, Vladimir Province. Their landowner had imposed on them the condition of paying a considerable monetary quitrent, so they arrived in this restless region in search of a source of funds.
At first they were engaged in small-scale trading. In 1823 they decided to apply their experience in tar distillation and turpentine production, so they built a one-still refinery in the region of the village of Akki-Yurt, not far from the city of Mozdok. Its construction involved using the schematic diagram of a furnace for production of pitch and turpentine. Using oil from the wells of the Voznesensk field as raw material, this refinery carried out the primary distillation of oil with a periodic cycle, producing “white” oil (unrefined kerosene distillate), which they offered as a therapeutic agent and also as one of the components of lighting material for street lights in Stavropol and other population centers of the North Caucasus.
A description of their refinery has survived: “An iron still is cemented in the top of a brick furnace, and 40 buckets of ‘black’ oil are poured into this still at a time. Once the ‘black’ oil has been poured into the still, a copper cover is put on it. A copper pipe passes from the cover through a wooden tub filled with water and makes one turn in the tub. The tub has a wooden bucket placed next to it against the pipe. The brick furnace is built with a windbox, and when it is fired at the base, oil from the still is drawn through the water into the pipe, where it is refined, producing ‘white’ oil, which flows out through the pipe into the bucket; 16 buckets of it is produced from 40 buckets of ‘black’ oil.”
The family quitrent enterprise of the Dubinin brothers operated for more than 20 years. However, since they remained serfs and as such were required to pay their landowner a large monetary quitrent, they could not adequately develop their production. In addition, intensifying market competition exacerbated their financial situation.
On March 17, 1844, the Dubinin brothers sent a petition for consideration to Colonel Prints, head of the Pyatigorsk District. They wrote: “We take the liberty to explain to the high authorities that we wished to expand the oil industry and trade here and in Russia to a greater extent, but we do not have sufficient capital to do this. Therefore, we most humbly request, in reward of our 20 years of labor and in order to promote the development of domestic oil trade of Russian production, to allow the delivery to us of sixty barrels of black oil from Treasury sources located near the Grozny fortress, every year for five years, without monetary payment, with permission for us to export freely from the Caucasus and Russia and to sell, at an unrestricted price, both the processed white and black oil, which is the residue after it is boiled down. If it is impossible to deliver the oil to us without monetary payment, then we ask for monetary assistance from the Treasury in the amount of 7,000 rubles in silver.”