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№ 8 (August 2007)

Editor's Letter

It’s that Time of Year Again – Happy Oilman’s Day!

Pat Davis Szymczak

Happy Oilman’s Day! Once again, Oil&Gas Eurasia joins the Russian oil and gas industry in paying tribute to the men (and women I suspect) who pioneered the building of the Russian oil and gas industry from Soviet times to the present.
Last year, in a spirit of having a little fun, I asked one of our journalists to telephone to some of the major oil company press offices and to the ministry to find out the real origins of the holiday. What we found was that not much was known.  So we did a little research on our own.

For those who might have missed that story, I’d like to refer again to it again in part. If you’d like to read the whole article, you can find it in our archive in the August, 2006 issue by going to our website: www.oilandgaseurasia.com.
Speaking as a Westerner, I’ve found that for the most part very little is spoken about West Siberian development in any of the global histories of the international oil industry I’ve ever read. I suspect that has something to do with the USSR being a closed country at the time these events were taking place. Now things are a bit different and so I offer you this history of probably is behind the annual celebration of Russia’s Oilman’s Day.

Websites suggest that the holiday was officially established by an order of the Supreme Soviet Presidium in 1980. We found also that oil and gas workers in Tyumen pioneered the celebration some 40 years ago. Why was that? Well, maybe because on Sept. 21, 1953, a gas fountain burst to the surface in the ancient Siberian town of Beryozovo, marking the beginning of a new era - that of Western Siberian oil and gas production. As our Anna Arutiunova wrote in her account last year (and from which much of what is to follow is excerpted), "technically, you could call this the birth of the modern Russian oil and gas industry.”

Having been offset by previous failures to discover gas in Siberia, Alexander Bystritskiy’s team did not take the necessary precautions against a spontaneous eruption of hydrocarbons driven by internal reservoir pressures. They simply didn’t know they’d hit the reservoir while drilling one last well on the outskirts of Beryozovo. For one thing, most of the work was finished and a sense of defeat hung in the air. That last well was in fact an accident - the drillers did not drill where they had been instructed to drill. They just drilled one last hole for the heck of it!

But as the team was withdrawing their equipment, water and gas shot skyward, expelling in seconds, everything the drillers had been working with downhole. The rush and roar of pressurized gas and liquids bursting up from the earth shattered the silence of the taiga, and soon disappointment turned to joy, as the oil workers beheld a black-and-blue-gold fountain over 50 meters tall.
Yuliya Lytkina, a research fellow at the geology, oil, and gas museum of Khanti-Mansiysk, told OGE what happened next: “Many inhabitants of the town, having been scared out of their wits, abandoned their homes, grabbed their samovars, and ran to the river, thinking that the end of the world had come. The unsettling roar could be heard 10 kilometers away. Salt water, spewed out along with gas, precipitated as rain for hundreds of meters around. The nearby woods died out.”

The event Lytkina describes was certainly memorable enough to have resulted in the declaration of a holiday in the relevant month - September. But in this history of Russian oil and gas, there were other equally important events.
Scholars surmise that there is a certain peculiarity about the historical development of Russia’s oil industry in that its development is characterized by “regional waves”, that is, a single region seems to dominate production for a time, only to be later eclipsed by a new region.

Not Russia, but China is considered to have been the first world power to extract oil and gas. The first written mention of oil in Russia came from the Ukhta River in the north of the Timan-Pechora region in the 15th century (where companies such as LUKOIL and ConocoPhillips produce oil today). Local inhabitants gathered oil from the river surface with buckets and used it for medical purposes, as a lubricant, and to administer blessings. In 1745, Fyodor Pryadunov got permission from Empress Elizabeth to begin extracting oil from the Ukhta River bed. In February of 1866, the first oil fountain in the country gushed forth in the Kudako River valley of the Kuban region.

An oil well was also drilled in 1846 on the Bibi-Aybat oil field near Baku, then part of the Russian empire. The southern regions, such as the North Caucasus and Baku, set the main stage for the beginning of development of the Russian oil and gas industry. Then followed the Russian revolution, oil fields were nationalized and the industry nearly destroyed. Restoration of the Baku fields occurred in the early 1920s, when under Lenin’s New Economic Policy, some foreign companies were invited to the USSR to help. Today clearly visible from the road leading from Baku’s airport to the city are 80 year old western style cottages built as an “expat village” to house these foreign workers.

The Caspian remained the center of the Soviet oil production until World War II, fueling the industrialization of Russia. Gaining control of the facilities in Baku and cutting off oil supplies to the Soviet Union was one of the main goals of Hitler’s army in World War II. In the 1950s, Russian oil and gas production was dominated by the region of Uralo-Povolzhye (Bashkiriya and Tatarstan).
In the 1960s and 1980s, revolutionary changes took place in the industry, which put the USSR, and later the Russian Federation, at the top of the energy power chart of the world. While some scientists in the Soviet Union were conquering the cosmos by launching the first artificial satellite and in the early 1960s, and the first man into space, other Soviet scientists were venturing deep into the earth interior.

The Western Siberian region was first explored by Vitaliy Zenchev, who died in a tragic accident at the Glubokiy Sabun river embranchment in 1955. As the country aggressively developed its automobile, aviation, railway, and building industries, and demand for plastic and synthetic materials grew, the Communist Party established The Third Program at its 12th meeting, demanding that oil and gas workers drastically increase hydrocarbon production to meet the country’s growing demands.

Today in Beryozovo, where the so called “Pioneer of Western Siberian Gas” well was drilled, there is a model of an oil derrick made of steel pipes, set in memory of the 40th anniversary of the discovery. Mikhail Lomonosov, a renowned Russian scientist, once said that “Russian might will accrue with Siberia.” On this year’s “Day of Oil and Gas Industry Workers,” we salute the might of those brave enough to venture into it - and those who today have inherited their legacy.

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