December 1, 2008
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Home / Issue Archive / 2008 / May #5 / A Tribute to Stalin's Oil Commissar the Late Nikolai Baibakov

№ 5 (May 2008)

A Tribute to Stalin's Oil Commissar the Late Nikolai Baibakov

In the Russian oil industry the senior workers are reverentially called “patriarchs”. And the greatest of these was  Nikolai Baibakov, Stalin’s “Oil Commissar” who died April 3, 2008 at the age of 97

By Yuri Yevdoshenko

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He had climbed the career ladder at a dizzying pace from oil engineer to deputy chairman of the Council of Ministers of the USSR and then to Chairman of the Gosplan (State Planning Committee) of the USSR.

In 1932 Nikolai Baibakov graduated from the Azerbaijan Industrial Institute, and he took his first job in the oil fields of Azneft – the primary oil producer of the USSR. He approached the work creatively. Early in his career he joined forces with other young engineers to organize the oil and gas exploration and to create experiments to find optimal regimens for deep-well pumps. The young engineers, in order to provide the oil field workers with better technical knowledge, gave classes using specialized literature on well operation. Then they started proposing technical innovations. For instance, in order to sustain and increase production, they started drilling Kirmakin and sub-Kirmakin deposits. The well rates grew, although water cuttings increased as well. The upper “Kirmakin” waters were eroding the cement packing and infiltrating the productive strata. Baibakov proposed a method called “repeated flooding”. The water was “walled off” with cement fed under high pressure. This method was named after Baibakov, although no patent was applied for. His innovation and now known internationally under a different name. Nikolai Konstantinovich also proposed a method of pipeless production; instead of oil-well tubing, which was scarce then, casing strings were used for oil lifting. As a result of these innovations, in 1934 the old deep-pumped wells, instead of yielding less oil than previously, as was normal then, showed an increase in the yield from 139,500 tons in January to 141,700 tons in May.

In 1936–1937 a wave of Stalinist purges swept the oil industry. As Nikolai Konstantinovich himself said, he escaped the purges only because he was conscripted into the Red Army. He returned to find many of his friends gone. Some, under prison guards’ surveillance, were exploring northern oil fields in the Komi Soviet Autonomous Republic. Others were languishing in jail, while others were suddenly filling vacant positions as heads of companies, chief geologists, or officials of the People’s Commissariat of Heavy Industry. In the late 1930s the young engineers were rising through the ranks at a speedy pace as they replaced bosses who had been jailed or executed.

In 1938 Nikolai Baibakov embarked on a meteoric career; first as head of Azerbaijan’s biggest complex of enterprises, Leninneft (LeninOil) and then as a director of the Vostokneftedobucha (EastOilProduction) group of companies, which was in charge of oil production from the Volga to Sakhalin and Uzbekistan. Ultimately, Baibakov traveled to Moscow to work in the People’s Commissariat of Heavy Industry. This was Nikolai Konstantinovich’s hard knocks school of engineering; administration and politics!

When the war began, Baibakov was a deputy of the People’s Commissar of Oil Industry. At this critical moment, he was in charge of three things: evacuation, oil prospecting in the Second Baku and, most importantly, making the officially set rates of oil production. As the German troops penetrated further into the country, the more difficult it became to handle these tasks.

No one could have imagined that the Germans could pose such a threat to the Soviets’ main oil regions – Grozny and Baku. Few remember now that the oil industry lived through two evacuation waves: The first in November-December 1941 and the second in July-August 1942. This means that equipment, pipelines, and oil refining installations were dismantled and shipped from Krasnodar and Grozny to Baku. Then they were hastily brought back and, no sooner were they re-installed than two months later, they were sent back to Baku, and from there to the country’s heartland of the Volga region and Central Asia. Nikolai Konstantinovich especially distinguished himself during the second evacuation, when he led a special team to plug the wells and demolish installations and structures that were not evacuated. The enemy was unable to extract a single drop of oil from the holes cemented shut using Baibakov’s methods. After the war the holes were redrilled, producing oil once again. Stalin, impressed by how well Baibakov performed these tasks, awarded Baibakov the Order of Lenin, and in 1944 appointed him a People’s Commissar of Oil Industry.

That was Nikolai Konstantinovich’s way of doing things all through his life – thoroughly and with foresight. Probably that was the reason why he was twice appointed, in 1955 and 1965 to head Gosplan, the main body in charge of the development of the Soviet economy. Nikolai Konstantinovich wrote several autobiographical books and the story of his life is well known. However, in the Russian State Archive of Economics we found an interesting and previously unknown document; a verbatim record of a meeting of USSR Oil Industry Minister Nikolai Baibakov and members of a delegation of Japanese industrialists in September 1965. That was one of Baibakov’s last meetings with international delegations during his tenure as minister before he was appointed as head of Gosplan. We offer the readers of OGE excerpts from this document, which sheds light on one of the modern episodes of the history of theRussian oil industry and the role played by the late Patriarch Baibakov.

On September 14, 1965 the following visited Baibakov: The chairman of the Federation of Japanese Businesses Mr. Uemura (head of the delegation), the vice-president of the Association of Power Industry Enterprises of Japan, Mr. Ishihara, and the chargé d’affaires of Japan in the USSR, Mr. Sunobe, and a secretary of the economy department of the Foreign Ministry of Japan, Mr. Kovado. At the start of the meeting an influential Japanese businessman Kogoro Uemura noted that “oil was very important in the trade between the USSR and Japan.” He was interested in three questions: 1) was it reasonable to expect increases in the volumes of oil export from the southern regions of the USSR, which were the main exporters of Soviet oil to Japan; 2) how was the oil industry in the just discovered Western Siberian oil and gas province developing; 3) were there plans to develop the oil industry in Eastern Siberia – near Khabarovsk and in neighboring areas?

The meeting transcript:
Baibakov: Increasing oil deliveries from the Black Sea region is very difficult because there is very little growth in the oil production rates in this area, whereas the fuel and energy balance in the European part of the USSR is very shaky and oil has to be brought from the Second Baku. We supply oil to the socialist countries, and for this end a Druzhba pipeline was built. (They were supplying pipes and other kinds of equipment.). The bulk of industry is concentrated in the European part of the USSR, and it continues to develop. So we will be developing the oil industry in the European part, while also looking for oil deposits elsewhere, in particular in Siberia… .
As the matter stands now, we have to focus our efforts on developing the Tyumen region. And if Japan wants Soviet oil (this is my personal opinion), it should be thinking Western Siberia oil, because in Eastern Siberia and in the Far East we have yet to discover anywhere near significant oil deposits…. For this end we have to solve several serious problems: [first of all], construction of an oil pipe-line to Nakhodka. You once broached the question of construction of such pipe-line.
Uemura: You wanted to build a pipe-line to Nakhodka and quoted the costs – 3 billion rubles. Am I correct?
Baibakov: We wanted to build one, but there are now pipes available. I do not know the exact cost, but in rough terms, I am being told, the pipe-line will cost about 2 billion rubles.
Uemura: How much time will be needed for the construction work?
Baibakov: Everything will depend on pipe delivery. Given present rates of progress, such [pipe-line] can be completed in 3-4 years.
Uemura: How many tons of oil can we get?
Baibakov: This depends on how many resources will be funneled into the development of Western Siberia. In order to increase the oil production rates by 1 million tons, about 130 million rubles has to be spent on the project overall (including prospecting, drilling, construction of the surface facilities and the pipe-line).
Meanwhile, may I tell you as an executive, sale of crude oil does not bring profit, it is better to sell commodities.
Uemura: You have no plans to sell crude?
Baibakov: No, I am telling this from an economic perspective… . To put on the agenda increases in oil export, we have to start investing in the development of the oil industry in Siberia today.”

Baibakov suggested to his guests that they meet again in two months in Japan, at a 3rd symposium on the development of oil resources in Asia and the Far East. Baibakov wanted to get to know the Japanese oil industry. Among the subjects that interested him were offshore development, the production of offshore facilities, and drilling and oil field equipment. He also wanted to learn about the operations of the Japanese oil-refining or petrochemical processing plants and oil industry R&D centers.

oon after, Baibakov was appointed to lead Gosplan, and he didn’t go to Japan until1968; a visit where he survived an assassination attempt. The Council of Ministers at a special meeting in December 27, 1965 commissioned Gosplan and the ministries of oil production industry, gas industry, and international trade, as well as other interested parties, with the task of “developing proposals on prospects of oil and oil products export from the USSR to Japan and on the feasibility of the construction of a pipeline to Nakhodka, supplying requisite calculations.” In 1973 at a meeting with a Soviet journalist, the head of the Federation of Japanese Businesses, Mr. Uemura, noted that Japan was “now strong enough” to accept Soviet proposals for joint large scale projects for developing Siberia’s natural resources. Baibakov and Uemura met a second time on March 22, 1974. The Japanese delegation then met with the secretary general of the Communist Party of the USSR, Leonid Brezhnev and the chairman of the Council of Ministers of USSR, Alexei Kosygin.

Pravda newspaper wrote on March 26, 1974 that “the parties agreed that it was necessary in the shortest possible time to continue the negotiations on cooperation in gas development in Yakutia, coking coal development in Southern Yakutia, and oil and gas exploration and development in the Sakhalin offshore area.”

The Japanese were particularly interested in a formula proposed by the Soviets for delivering oil to the Pacific coast. As Pravda wrote, “the Soviets said that they were ready to continue the negotiations on 20-year-long export of Tyumen crude from the USSR to Japan.”

By 1975 it was apparent that the cooperation between the USSR and Japan in the power industry would be focused on the Sakhalin offshore area, which was much closer to Japan than Siberia. That same year saw the establishment of the Japanese venture Sodeko for handling the cooperative development of the Sakhalin offshore fields. Slowly the machinery of cooperation picked up speed.
And the idea of an Eastern Siberia – Pacific pipeline, pioneered by Baibakov, took on new life at the close of the 20th century.

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