United States. Dept. of Commerce and Labor United States. Bureau of Foreign Commerce.

Consular reports, Issues 224-227 online

. (page 28 of 92)
Online LibraryUnited States. Dept. of Commerce and Labor United States. Bureau of Foreign CommerceConsular reports, Issues 224-227 → online text (page 28 of 92)
Font size
QR-code for this ebook


American company would not make much out of its pipe contract;



♦See Consular Rkforts No. 212 (May, 1898), p. 37.



Digitized by



Google



RUSSIAN PETROLEUM TRADE. 221

but if, as is said, it gets $2 per foot, it must have a pretty fair mar-
gin to work on.

The object in constructing this pipe line is to add to the trans-
portation capacity of the railway, as the refined (the line is for this
class of oil only) will be brought by rail to Michailovo, a distance of
about 415 miles from Baku, and from there piped to Batum. As
before mentioned, the line is 8 inch and the pumps are of the most
approved American pattern, made in the United States under the
inspection of a Russian engineer especially for this line. One set of
the pumps — /. e.y for one pumping station — has already been deliv-
ered and the others are en route, so that there is no detention on
this account. The first pumping station will be at Michailovo, by
which the refined will be forced, over an elevation of 500 to 600
feet, a distance of 77 miles to the station of Samtredi, a fall of prob-
ably 2,000 feet from the summit. From Samtredi there is not much
of a fall to Batum. It is gradual, and there are no elevations to
overcome; but about halfway between Samtredi and Batum there
will be still another station. How much this line will increase the
transportation capacity of the railway seems to be an open question
here. It may, however, reduce the cost.

BATUM EXPORT.

There was a small increase in the export of all products from
Batum last year, but the increase in illuminating oils was only about
10,000,000 gallons; so that this trade can not be held accountable
for any falling off in the American export, and until the completion
of the pipe line for refined from Michailovo to Batum (which will
hardly be in time to play much of a part in the business of this year)
there can be no material increase in the Russian export, owing, as
stated before, to the limited capacity of the railway.

For the reasons before mentioned, it will be understood that
there was no great energy shown by the export trade for the
greater part of the past year; but the capacity of the trade was
tried the last month of the year and up to the end of January this
year, and case-oil loading particularly was carried on slowly. Owing
to the very bad weather, which prohibited such loading in January,
the exporters escaped with little demurrage. There was no lack of
oil here; but, like most good things in this world, it was not equally
distributed, and the principal holders seemed to have no desire to
ship, while those who had shipping engagements either oversold or
overestimated the capacity of the railway. Since January, however,
the output has been remarkably light, due partly no doubt to the
uncertainty of the freight rate.

About four weeks ago, the trade here received a pretty severe



Digitized by



Google



222 RUSSIAN PETROLEUM TRADE.

shaking up by a peremptory notice from the military commandant
annulling all permits for new tankage and prohibiting the comple-
tion of tankage then under construction. This was modified, a few
weeks later, to permit the completion of tankage actually in course
of construction.

A few days after the promulgation of the order mentioned, the
newspaper hinted that a commission might be expected this month
to decide whether or not all the tankage here, except that suf-
ficient for a day's supply for each of the case factories, must be
removed several miles, out of range of the fortifications. As, owing
to the strict press censorship in Russia, the utterances of the most
insignificant newspaper carry considerable weight, this caused not a
little uneasiness on the part of the trade, as the removal of nearly
1,000,000 barrels of tankage is no trifling matter. Within a few
days, the scare was revived by the statement of the newspaper that
military photographers were at work on photographs and plans of
the tankage for the use of the commission which is supposed to be
en route. While I hardly think anyone here expects that the tank-
age will be ordered moved, there is a chance of it.

The reason assigned by the public generally for the contemplated
removal of the tankage is that, in case of a fleet attacking Batum,
the tanks would immediately take fire; and, as' they are between
most of the forts and the sea and would likely burn for days, they
would obstruct the view of the sea, and thus give an attacking fleet
a great advantage; for, while the vessels might move, the forts are
stationary. It was proposed by some of the exporters to petition
the Government against the removal of the tankage, giving assurance
that they would themselves set fire to their tanks upon two days*
notice from the authorities; which idea has, I think, been abandoned,
as it probably occurred to some of the interested parties that the
proposed notice from the Government would not be necessary.

Between the uncertainty of the freight rate and the stability of
the Batum tankage, which is absolutely necessary for the carrying
on of the trade, you may imagine that the Batum exporter is not
getting much enjoyment out of life; but if he is not making money,
he is having excitement.

FOREIGN CAPITAL.

Last year, I mentioned that much foreign capital had come into
the Baku oil trade. Since then, more has come in, and I think
that the British investment at Baku alone in the last two years was
not less than $10,000,000, and there are prospects of still more money
coming. The first investment, although seeming wild at the time it
was made, was remarkably successful. This was the purchase of
producing property for about $2,500,000 and putting it on the Brit-



Digitized by



Google



RUSSIAN PETROLEUM TRADE.



223



ish market in the shape of a stock company with a capital of about
$6,000,000. Notwithstanding this great inflation, the company paid,
I think, 33 per cent and put away a handsome surplus for its first
yearns business; in fact, the property actually paid the purchase
money back in one year. I must add, however, that to this com-
pany belonged the three wells at Bibi-Eibat which produced over
6,000,000 barrels last year, and one of which produced largely the
last two months of the preceding year.

Naturally, the success of this company boomed Baku producing
property in Great Britain, and now the price for that sort of prop-
erty is literally '* out of sight." And yet, if it is correct, as I am in-
formed, that there is plenty of British capital waiting for investment
at Baku on the basis of ten to fifteen years' purchase — /. ^., the price
to be ten to fifteen times the average income of the property for the
last three years — I see no reason why the whole Baku business can
not be had, as it would be quite a fine thing for sellers. The basis
for buying oil production is quite new, and it is difficult to believe
that there are men with money ready to buy oil production in the
hope of getting their money back in ten to fifteen years.

The advent of so much foreign capital seems to have worried the
Russian press very much, and has brought down the usual wrath
against the unfortunate foreigner. The wail that foreigners are get-
ting the wealth of the land has gone up from all sides, and to it has
recently been added the warning that the British purchasers may
only be stool pigeons for the great and powerful American com-
petitor of Russian oil, which will, if not soon checked in its victori-
ous career, control the whole trade and compel the poor Russian
peasants to pay outrageous prices for their illuminant orgo tobed in
the dark. Of course, this sounds very funny, but I am sure that the
Russian newspapers are serious and really believe what they say.

GROSNI.

The Grosni field has exhibited no redeeming features in the past
year, as, notwithstanding considerable drilling, there has been not
only no increase, but actually a decrease in the production, as will
be seen from the following statistics for 1897 and the first ten months
of 1898:



Company.



Akhverdoff Company,
Maximoff Company....

Moscow Company..

Dnieper Company.......

ToUl



1897.



Barrels.

1,980,000
420,000
276,000
78,000



2,754,000



1898(10
months).



Barrels,

1,178,269

216,484

162,166

xi6,o6i



1,672,980



Digitized by



Google



224 RUSSIAN PETROLEUM TRADE.

The barrels hold 42 gallons. Of the nine firms drilling in this
field, the above four were the only ones which had any production.
The figures show a falling off of about 2,000 barrels per day, not-
withstanding the fact that there were 18 wells producing on October
31, against only 12 at the beginning of the year. The following is
a comparison of the work in the field at the close of 1897 and 1898:



December 31-
Description.





1897.


1898.




Number.

12
7

24
3
6


Number.
36




13
24

J















Wells producing

Wells idle.

Wells drilling

Wells drilling deeper..
New derricks



Big wells have been reported from Grosni several times during
the year, but they were either overestimated or very short lived,
for the production shows no signs of them.

The outlook is certainly not more promising than it was last
year, for some wells have been drilled to more than 2,000 feet with-
out a sign of oil, and many other wells which are drilling are much
deeper than those which produced most of the oil in the past.

The production was sold chiefly for fuel, as it gives much less
illuminant than Baku oil and deteriorates more rapidly from expos-
ure in open reservoirs, requiring not more than a few weeks of such
exposure to destroy it for illuminating purposes and to make it quite
as heavy as the Baku standard for residuum. There are two modern
refineries at Grosni; but, as less than 1,500,000 gallons of refined
oil have- been shipped from there during the year, it seems that
they did not work much of the time. The refined mentioned was
received at Novorossisk and from there exported to England early
in this year. The only export from Novorossisk in 1898 was a small
lot of refined, which had been in tank there for so long that it was
only fit for distillate and, I hear, was given away in order to clear
the tanks. It amounted to about 52,000 gallons and went to Fiume.

There is a small refinery at Novorossisk, belonging to people
who have some wells in the vicinity which produce a very heavy oil.
They also receive Grosni crude, which they run wholly for residuum.
The small amount of refined which they produce is sold locally and
at the small seaports in the vicinity, while the residuum goes prin-
cipally to Odessa for fuel.

James C. Chambers,

Batum, February 2j, i8g^. Consul,



Digitized by



Google



RUSSIAN PETROLEUM TRADE.
Number of wells producing.



225



Month.



Balakhani-
Sabunchi.



1897. 1898.



Romani.



1897. 1898.



Bibi-Eibat.



Total.



Z897. 1898.



X897.



January

February ....

March

April.»

May

June

July

August...

September ..

October

November....
December....



Soa
500
516
527
540
554
56t
567
589
60X
591
599



619
639
659
644
64a
670
683
690
706
736
740
770



31-
26

33
3a
38
40
40
33
38
41
39
42



599
598
614
636

643
658
668
6^7
688
713
697
703



73a
747
768

755
764
791
809
806
838
863
869
905



Average for the year..,



657



803



Number of flowing wells.



Month.



January

February ...

March

April

May

June .-

July

August..

September ..

October

November-
December...



Average for the year...



Balakhani-
Sabunchi.



1897. 1898.



Romani.



1897. 1898.



Bibi-EibaL



Total.



1897. 1898.



1897.



189S.



9
13



14
15
15
IS
13
14
14



Number of wells started drilling.



Month.



January

February ..

March.

April

May

June

July

August.

September

October

November..
December..

Totol.



Balakhani-
Sabanchi.



1897. 1898.



Romani.



1897. 1898.



38



Bibi-Eibat.



ToUl.



1897. 1898.



1897.



1898.



19
31
34
29
38
30
26
31



28

30

34

24

29

36

36

35 •

34

54

75

41



456



No. 225-



Digitized by



Google



226



RUSSIAN PETROLEUM TRADE.



IVelis completed, with depth ami average daily production.



Month.



January ....
February^

March

April

May

June

July



August

September...

October

November...
December...

Year...



January ....
February-
March

April

May

June

July

Aufirust

September.
October ....
November.
December.

Year.



Balakhani-Sabunchi.



1897.



1898.



Wells.



Average
depth.



Feet.
825
806
I, "5
936
747
747
784
865
830
825
780
657



815



Average

daily
product.



Barrels.
a, 401
226
37a
401
4"
238
338
310
306
251
276
273



Average



WelW. I^7^8»l daily"











Feet.


Barrels,


22


725


270


>4


752


207


x6


9x8


602


24


837


248


5


890


623


15


819


319


20


873


568


18


933


203


24


8oi


255


21


917


226


23


902


436


20


880


259


222


845


33X



Month.



Roman!.



1897.



Wells.



Average
depth.



Average

daily
product.



1898.



Wells.



I Average
; depth.



Feet.
1. 134



I



266
1 1372
1,204



1,431

1.617

905

1.316



Barrels.

265



2,759
360



480
598
440
304



Feet.

1,453
1,440
1,638
1.153
1,292
1,652

1,425
1,624
1,295
1,306
1,540
1,673

1.448



Average

daily
product.



Barrels.

160

3.600

73

281

5,040

254

260

2,447

4,000

464

213

163

902



Digitized by



Google



RUSSIAN PETROLEUM TRADE. 227

Wells compUUd^ with depth artd average daily production — Continued.



Month.



Bibi-Eibat.



1897.



Wells.



Average
depth.



Average

daily
product.



1898.



Wells.



Average
depth.



Average

daily
product.



January ....
February..

March

April



Feet.
X.463
X.335



Barrel*.

1,192

460



May..

June

July

August

September.^..

October

November

December

Year.«..



1.456
1.442
X.095

Z,5I2



1,617



964



1,284
32,797

1,666
600



264



Feet.
1.596
X.495
x,495
1,484



Barrels.

29,094

2,06a

2,836

x,oox



X.673
1. 517



339
979



1.750
1,827
1,554
1.694



240

100

6,880

273



1,595



5.075



Month.



January

February

Maroh.~

April

May

June^

July«

August

September....

October

November....
December .-.

Year...







Total.






X897.


1898.


Wells.


Average
depth.


Average

daily
product.


Wells.


Average
depth.


Average

daily
product.


14
II
II
18
25
25
18
20
12
22
16
17


Feet.
912
898

x,"5
816
798
875
800

1,025
962
955
814
675


Barrels.
380

278
37a
787
436
1.839
395
380
367
375
276

273


30
16
18
29
6
x8
24
19
26
24
25
23

258


Feet.

931
861
988
925
958
960
972
970
857
987
954
985

937


Barrels.
2,522
460
781
329
902
304
579
321
420
248
538
249


8S0


813


653



Digitized by



Google



228



RUSSIAN PETROLEUM TRADE.



Average daily production of Baku fields in j8g7 and i8g8.



Month.



January

February

March

April

May

June

6 months..

July

August

September...

October

November

December

Year



Flowing wells. I Pumping wells.



1897.



Barrels.*
46,070
60,621
as I 793
28,985
21,670
31.535



35.428



20,020
10,509
18,500
12,929
53,700
21,47a



28,935



1898.



Barrels*

59.365
X03.963
23,861

33.49a
24,129

X6,020



43,680



30,0x5

22,933
39.764
40,212

37,960
37.797



37.303



1897.



Barrels.*
102,350
97.682
102,324
109,556
108,504
1x0,714



105,254



xxo,oi6
"3.145
1x4,858
X3X,873
xi8,68o
109,054



109,956



X898.



Barrels.*
"3.156
"3.739
"8.589
"7.576
X33,67o
X26 297



1x8,882



132, X97
119,624

« 35, 737
130,063
139,378
128,398



X22.413



ToUl.



1897.



Barrels.*
148,430
158,303
138,117
X38.54X
J30.X74
143,349



140,683



«3o,036
123,654
133.358
134,802
171.389
130,526



138,891



1898.



Battels.*

173,521
3x7,692
142,450
151,069
«47,797
143,317



x6i,562



152,212
143,557
155,501
170,275
157.338
168,195



159.615



* Of 43 gallons.
Output of all products from Baku in j8<)8.



Month.



January

February ..

March

April

May

June

July

August

September .

October

November..
December..

Total.
1897



Illuminating.



Gallons.

25,825,000

38,095,000

35. 235.000

46,250,000

44,890,000

44,665,000

50,995.000

47,740,000

43,225,000

41,075,000

33.995.000

31,2x5,000



473.205,000
458,035,000



Lubricat-
ing.



Gallons.

3,xao,ooo

3,565,000

5.455.000

3.555.000

6,280,000

5.505.000

4,625,000

5,800,000

4,765,000

4,255,000

3,X4o,ooo

3,040,000



52,105,000
45,860,000



Residuum.



Gallons.

5,635,000

9,830,000

46,165,000

135.050,000

174,420,000

162,450,000

221,025,000

192,100,000

166,355,000

83,465,000

7,165,000

8,155,000



1,211,805,000
1,127,100,000



Crude.



Gallons.

4,810,000

7.550,000

21.355,000

30,645,000

'49.565,000

48,100,000

7,0x0,000

30,555,000

19,885,000

9,880,000

4,360,000

5,745,000



219,460,000
130,045,000



Total.



Gallons.
39,390,000
48,030,000
108,210,000
205,500,000
375,155.000
360,720,000
383,655,000
266,195,000
234,230,000
138,675,000
48,660,000
48.155,000



1,956,575.000
1,761,040,000



Stocks


of all products


at Baku Decent


berji, j8q7


and j8g8.




Product.


1897.


1898.


Crude:

At wells.


Barrels.
592,547
1,840,212


Barrels.
859.584
1,462,344














2.432,759
















Gallons.
67,274,980
9,610,725
263.532,270


Gallons.
51,805,615




11,605,275




265,121,885













Digitized by



Google



RUSSIAN PETROLEUM TRADE.



22Q



^



<?



^



>3
It



<.






I






5



1

•5
a
1

a



o

I

•c



5



2
u






ii§






. o I* O moo N n^o m \o o«t«>M ^o<o>otN.F>ao ^>
; ? - 8 « «^ :? « O ;; ^ 00- « « H « H jn co



'S i ^ ^ ^* s ^ fc <s^ i i i i i

00 MOO a-^OOO « '••O'OO H f0<O



C« 11 M « O' M



§1



t^ ■;



tCMO^t<.CIW>H«H



F.« ft woo M\o 0«rt



t m O' O « I



a



31



^'S"






l'^



^%






II



8 3>



•£» 5 *






v8 5 00 5 o w

O (> 00 •« m" Oj
<0 00 "^



S> 15 8 ^ 8 S.

m M 00 M o t^

H C) o fo o *•

w fO VO 00 M O



t>> ro 00 00

O CI M



\n rr%



?? 8 S:^'^



iS

C CQ






O «n

no" <»»
in r*j



I? I

In, tv S



II

in M
00 rs

M 00



8 ^



in 00

CO t*^



I



^1
ii



fi fo



8; -^



in f Q O m
in 00 O ■♦ «



Is



s, g s,

00 in 00

w O M '



I



a "



Ii



V c«



9- rt

-_ a



;2 a £■ § -5 H ^ 5



2.



1



i



0> (1



8 ^

<H In

i i,

tN tN



a

a



.S
•c

CQ



■S

bo
c

13

3
a



J3
C



a



1

C



a

a



3
(3



(A

I



Digitized by



Google



230 EXPORTS OF SIBERIA.



EXPORTS OF SIBERIA.

Since the Siberian Railway has brought the eastern sections of
Russia into the area of universal trade, the question of the future
importance of Siberia as a competitor in the international market as
regards natural products, and as a country having more or less open-
ings for the disposal of manufactured goods, is becoming of great
interest to all European countries. The resources of Siberia are, at
the present moment, undergoing careful investigation on the part of
both Russian and foreign capitalists.

Siberian newspapers publish daily the formation of new com-
panies and commercial undertakings through banks and agencies
for the benefit of firms in foreign countries which desire to gain the
Siberian market, and likewise a part of the Chinese trade.

The railway has also opened up a new market for each province
in European Russia. It is reported that in Poland several factories
have been opened exclusively for the manufacture of goods suitable
for the Siberian markets. The Ural iron merchants, owing to the
keen competition of the manufacturers of southern Russia, are now
directing their energies toward Siberia.

The agricultural interests of Russia, long before the opening of
the Siberian Railway, foresaw serious competition in grain, and there-
fore succeeded in raising the tariff of transportation on the Siberian
product.

It must be mentioned that the first year's working of the railway
did not realize expectations, as the cargoes were so heavy that much
grain had to wait for transportation beyond the Urals. The Samara-
Zlataoosk Railway also, not being prepared for an increased traffic,
was incapable of satisfying the demands.

Siberia entered the world's trade under very favorable conditions;
with bad harvests in Europe and rising prices, Siberia was able to
place on the market enormous quantities of corn. Western Siberia,
during the first half of 1897, sent nearly 58,000 tons, and during the
second half, 174,000 tons; but, owing to deficiency in rolling stock,
80,000 tons of grain remained beyond the Urals.

During the first half of 1898, about 170,000 tons were sold at good
prices and hurried abroad by the Baltic and Black sea ports, while
some was sold in Poland and Moscow.

Grain from Siberia can be transported to Russia by two routes,
either by water through Tumaine or by rail through Cheliabinsk.
The former route has by no means lost its importance; on the con-
trary, transports have increased.



Digitized by



Google



AGRICULTURAL PRODUCTS OF SIBERIA. 23 1

Cheliabinsk alone sent nearly 100,000 tons of grain, not including
that which passed through it; therefore, to have an accurate idea of
the Siberian export for the first year of the railway, it is necessary
to take into consideration three categories of transport — /*. ^., ex-
ports from Cheliabinsk, by the stations of western Siberia, and by
water through Tumaine, the transmitting point for cargoes coming
by the rivers Ob and Irtish.

Not reckoning caravan transports from the government of To-
bolsk, the export of cereals from Siberia in 1897, according to Siberian
Life, was about 400,000 tons. Of this quantity, nearly 91 per cent
was wheat and flour, 5 per cent oats, and a little more than 3 per
cent other grains. The exports in 1897 were distributed as follows:

Tons.

Baltic Sea ports 229,225

Black Sea ports 9.338

Western frontier 39.048

Rivers Volga and Beloy 5. 500

Internal Russian markets 6,225

Ural works 4.709

From the above, it will be seen that 94 per cent of Siberian wheat
was sent abroad, and if the wheat sent down the rivers to wharves
in Samara, Oufa, and Perm, also intended for export, is included,
the quantity will be more than 95 per cent. The largest quantity
was exported through Reval — namely, 145,161 tons, or over 48 per
cent of the whole export. After Reval comes St. Petersburg, Libau,
and Riga, and lastly the southern ports, Novorossisk, and Rostoff.

The large quantity consumed by the Ural district is noticeable.
The railway has opened communication with central and western
cities in Siberia, which naturally, up to the present, have experi-
enced all the disadvantages of high prices. About 16,000 tons of
grain were transported to central towns, such as Tomsk, Archinsk,
Krasnojarks, and Irkutsk. The railway, therefore, while affording
an outlet for Siberian grain, has at the same time connected the
manufacturing districts of the Ural with eastern Siberia.

Thomas Smith,

Moscow, February 22^ i8^g. Consul.



AGRICULTURAL PRODUCTS OF SIBERIA.

In my report of February 22, 1899,* I gave an analysis of the grain
export from Siberia during the first year of the opening of the West-
ern Siberian Railway. I now wish to refer to other items of export.

The freights usually carried on the railway are grain, oil seeds,



*See preceding report.



Digitized by



Google



232



AGRICULTURAL PRODUCTS OF SIBERIA.



flax, wax, honey, eggs, meat, tallow, furs, wool, bristles, butter,
sheepskins, hides; also tea and cedar nuts. For the first year of
working (1897), from the eastern stations of the Ural, Ekaterinburg
to Tumaine, the whole transport by the Siberian Railway consisted
of—



Articles. Quantity.


Articles.


Quantity.


Acrriculturftl products... .•«..•...



Online LibraryUnited States. Dept. of Commerce and Labor United States. Bureau of Foreign CommerceConsular reports, Issues 224-227 → online text (page 28 of 92)