Meanwhile, the delayed expedition to prospect for oil-bearing lands in Russia took place in 1718, and at the tsar’s order, court physician Gottlieb Schober was sent to the Terek-Sunzha region. Not far from a mineral hot spring, he discovered that “oil or petroleum flows from a certain mountain... no one collects it or uses it.”13
At the direction of Peter the Great, the statesman and diplomat Artemy Volynsky (1689–1740) inspected the site of this same region. In a letter to the tsar, he conjectured that “this is a flow of true balsam sulfuris,” which in this area “is called petroleum out of ignorance,” and is used “instead of tar to lubricate carts, of which, Majesty, I expect you can get a pood [36 pounds] at 30 or more.”14
As the number of Russian enterprises and mining operations grew sharply, it proved inconvenient to combine the management of mining plants and manufactories in one government agency. Peter the Great’s decree of December 10, 1719, “On the Institution of the Mining Board for Allocation to It of Ore and Mineral Affairs,” created a special institution, the Mining Board, with a diversified network of local institutions. In his decree, the tsar wrote: “Our Russian state is blessedly richer than many other lands in both required metals and minerals, which have remained unsought by any diligence until the present.... God’s beneficence must not remain underground in vain.”
On that same day in 1719, Peter the Great established the Mining Privilege, defining the government’s policy in the mining industry for the next 88 years, until 1807. The Mining Privilege declared all minerals the property of the tsar, regardless of who owned the parcel of land. Landowners were granted the right of preferential development of minerals and construction of plants. The Mining Privilege established the right of hereditary ownership of plants, protected industrialists from interference by the local administration, guaranteed financial assistance in the construction of enterprises and the right of free sale of smelted metal, and set the amount of compensation for discovered ore. In 1739, the Mining Privilege was supplemented by a special Mining Regulation.
In addition to other issues, the Mining Board also addressed oil prospecting. In the spring of 1721, Mezen resident Grigory Cherepanov reported to the Mining Board that he had found an “oil spring” in Pustoye Ozero District of Arkhangelsk Province. Tsar Peter the Great, to whom this was reported, immediately directed a thorough investigation of the oil source, as well as the awarding to “ore expert” Cherepanov six rubles, “so that he would also have a desire to find more ore in the future.”
Subsequently, the Russian emperor maintained an interest in petroleum and even ordered the assembly of knowledgeable people for discussion of the oil business. Several inspections of the Ukhta oil source were made, during which eight bottles of Ukhta oil were delivered to the capital in 1724.
Peter the Great’s Caspian Campaign
In the first quarter of the 18th century, the Caspian region became an object of Emperor Peter the Great’s constant attention. He regarded it as an important strategic springboard, both for the defense of the Empire and for the future development of Russian trade with the East.
Persia claimed the role of partner to the Russian Empire during that time, as it possessed considerable capabilities and, in turn, badly needed a strong ally capable of protecting it from claims by the militant Ottoman Empire in the west and restless Afghan tribes in the east.
The evolving situation and complication of conditions inside Persia forced Russia to act in various directions. The first step was the signing of a mutual trade treaty with Shah Soltan Hosayntan Hosayn in 1718, specifying certain actions by the Russians both to protect their own interests and to assist the legal Persian government if necessary.
A steady stream of alarming reports from Persia prompted the Russian government to consider a possible adverse scenario in the development of events, and Peter the Great began planning a Russian military campaign to the Caspian to preclude them.
Thorough preparations for this complex military operation required nearly three years. First, two Russian officers, Fëdor Soymonov and Karl von Werden, performed a thorough survey of the region in 1719, drawing up a detailed map of the Caspian Sea.
It was during this time that Fëdor Soymonov made a special visit to the oil fields on the Absheron Peninsula. It is clear that Emperor Peter the Great did not overlook his report, particularly its mention of the fact that, from 1716 onward, petroleum from the Baku oil wells—which were farmed15 to a vassal of the Persian shah, Soltan Mohammad Hosayn Fetig ‘Ali—earned the shah’s court the Russian monetary equivalent of over 49,000 rubles annually. If we consider that the maintenance of a single Russian army soldier cost about 1.5 kopecks per day, this sum would have been sufficient for the annual maintenance of a Russian army of nearly 10,000. Furthermore, Peter the Great’s numerous notations on the reports of Fëdor Soymonov and Karl von Werden, and on the reports of the Russian envoy to Persia, Artemy Volynsky, convincingly show that petroleum had gained a firm grip on the emperor’s attention.
In the winter of 1721–1722, armed units of militant Afghan tribes overthrew the Persian ruler, Shah Soltan Hosayn, and Prince Tahmasp, the lawful heir to the throne, was forced to flee and hide in the Trans-caspian regions of Persia. This gave Peter the Great a pretext to come to the defense of the lawful authority, and he personally led an army of 50,000 during the Persian (Caspian) campaign of 1722–1723.16
The beginning of May 1722 was the official start date of the “Caspian campaign.” Admiral General Fëdor Apraksin (1661–1725) commanded the navy, and a flotilla of cargo ships (scows) was commanded by the aforementioned Lieutenant Captain Karl von Werden, who was thoroughly familiar with the region.
In August 1722, while Russian ships were en route to Derbent, Emperor Peter the Great and several fellow travelers went ashore near the town of Tarki [later Fort Petrovsk, modern Makhachkala] and set out on foot for the oil wells, which his majesty wished to see. On August 23, 1722, the authorities and people of Derbent met the Russian emperor with a most honorable reception. The city’s naib (head of the city administration) gave him the keys to the city gates. Peter the Great then returned to Astrakhan, turning command of the Russian troops over to Lieutenant General Mikhail Matyushkin (1676–1737).
In Astrakhan on November 4, 1722, Peter the Great wrote an instruction for the commander titled “What to Do When, God Willing, We Take Baku.” Included in this instruction was the significant phrase, “Explore duties and revenues. And especially on petroleum and saffron. How much they were in good times and how much now, and how much went to the shah and how much went in pockets.”
On August 18, 1723, on orders from Lieutenant General Matyushkin, an “Inventory of Oil Wells and Vaults near Baku” was drawn up. According to this inventory, in the field, i.e., 6.6–13.2 miles from Baku, there were 66 operational wells and 16 storehouses; in a second field, 13.2 miles from the city, there were four wells with “white” petroleum; and outside the city gates were 14 storehouses containing oil and five empty storehouses.
In a second instruction dated September 9, 1723, Peter the Great ordered the retrieval of several dozen pounds of oil, which were delivered to St. Petersburg in eight bottles in early 1724.
The lawful government of Persia, in the person of the new Shah Tahmasp II, deemed the Russian troops’ Caspian operation a mission of liberation. In gratitude for saving the country, Persia ceded western and southern parts of the Caspian coast, including the cities of Derbent and Baku, and the provinces of Gilan, Mazandaran, and Astarabad (now Gorgan) to Russia under the Petersburg Treaty, signed September 12, 1723.