The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea Hardcover – Oct 23 2007
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About the Author
Steve LeVine was a foreign correspondent for eighteen years, posted in the Soviet Union, Pakistan, and the Philippines, reporting for The Wall Street Journal, The New York Times, The Washington Post, Financial Times, and Newsweek. He lives in Dallas.
Excerpt. © Reprinted by permission. All rights reserved.
In the early nineteenth century, Baku was a frontier settlement with the air of a medieval duchy. Within its seven-hundred-year-old walls, narrow cobblestone streets snaked past bustling outdoor markets, small mud-sided homes, and a minaret from which a princess had jumped to her death to escape her incestuous father. Rainbow-colored wooden carts called arbas, their wide carriages mounted on irregular seven- foot-tall wheels, transported people and goods across the surrounding desert. The crescent-shaped bay—seven miles from tip to tip and fifteen miles in circumference—teemed with fishing boats from the Russian city of Astrakhan up the coast and black merchantmen from downcoast Persia.
Baku was not regarded as a benign place. Alexandre Dumas père witnessed a frightening menagerie in 1858—“Tigers, panthers, jackals that roam through the whole province; the plants; the insects— locusts, scorpions and poisonous spiders.” And then there were the relentless dust storms. A British petroleum engineer named A. Beeby Thompson wrote of winds that deposited as much as five feet of sand on roadways, halting all traffic. “There is no complete escape from these sandstorms,” Thompson observed. “The fine dust penetrates everywhere; it accumulates in the pockets; it finds an entrance into the watch case, and causes the works to get clogged; it defies double windows and shutters, and the silicious particles accumulate in the house to such an extent that shovelfuls of sand may be removed from a Baku drawing room after a storm.” Still, the wonders of Baku astonished those daring enough to visit. At night, when the winds quieted down, it became a magical place. Fire danced from the land and sea; in November and December, it lit the western horizon an eerie blue. A British professor visiting in 1845 described “a fairy castle” in which “multi-colored tongues of fire dance weirdly in the winds.” In 1876, a journalist declared the spectacle “as wonderful as the Solfaterra at Naples, or the Geysers of Iceland, and to me infinitely more curious.” Other visitors spoke of huge bubbles that suddenly appeared on the surface of the Caspian, capsized ships, and, if a torch were tossed overboard, produced a wall of flame. Visitors also reported a trick of physics in which the fires did not burn hot— Ludvig Nobel emerged unscorched after steering a steamboat straight through the blazing sea.
The source of these phantasmagoric displays was Baku’s tremendous store of hydrocarbons. Experts speculated that the region was on top of a seventy-million-year-old residue of dead microorganisms. Another possibility was that detaching from the Black and Mediterranean seas had turned the Caspian into a saline death trap that entombed thousands of fish and other animals every day. Fumes from these ancient petroleum deposits continuously leaked to the surface, where they ignited at the slightest provocation.
Baku’s oil earned an early, almost mythic reputation. Marco Polo’s was perhaps the first written account. He reported a gusher that in a single hour produced “a quantity of oil sufficient to load up one hundred vessels.” Later reports were strikingly similar. Eighteenth- century British trader Jonas Hanway described Russians sipping cordials of Baku’s “white oil,” a spontaneously occurring mixture of natural gas and petroleum that they thought chic and a certain cure for venereal and heart disease. While nearly all the world cooked by wood fire, a visitor to the district of Surakhani found that fumes escaping from the ground enabled the preparation of heated meals. Villagers simply dug into the soil and, applying a live coal, ignited a blaze. The natural gas that produced this phenomenon could be dangerous. In 1754, a traveler spoke of eight stabled horses being burned alive when the earth beneath them accidentally caught fire.
One peculiarity especially absorbed visitors—the theology attached to Baku. Zoroastrianism, the monotheistic Persian faith that originated the notion of angels, paradise, and the underworld, taught that fire purified the soul. Hearing of Baku and believing that the fires had burned since the Flood, Zoroastrians flocked there. They built temples where flames fed by natural gas jetted through porous limestone—the same jets that created the city’s nightly fusing of Lewis Carroll fantasy and Dantean nightmare. The Zoroastrians fled in the middle of the seventh century, after Christian invaders sacked their temples and Arab conquerors insisted that Baku convert to Islam. Some brave followers made pilgrimages to Baku for centuries afterward, but by the 1860s xenophobic Orthodox Russia had all but halted even those short visits.
The first oilmen of Baku simply took out their shovels and dug or used their bare hands—the oil was that close to the surface. Obtaining the rights to do so was simple; you could buy or lease. Written evidence of one such agreement dating back to the Muslim year 1003—about 1595 by the western calendar—was found on a stone unearthed in a Baku oil pit. An Arabic inscription recorded the name of a landowner, Allah Jaz, the son of one Mohammed Nurs. The stone indicated that Mr. Jaz did not himself dig for oil but rather leased his property to an unnamed tenant. The tenant would have collected the oil in a pond lined with stone, then poured the unrefined crude into boordukes, goat- or ram-skin bags holding about twelve gallons. If Mr. Jaz’s tenant were export-minded, he would have loaded the boordukes onto camels, two bags per beast, and shipped them in caravans across the desert. An arba could carry ten times as much oil but was not sufficiently sturdy to survive the arduous trek to distant markets.
So it went for the next two centuries. During that time, Mr. Jaz’s property, in a district called Balakhani, was absorbed into the Persian Empire, then in 1813 into Russia. On the other side of the world, America had yet to develop a commercially exploitable oil industry. But that was about to change, sending shock waves all the way to Russia and, finally, to Baku. In 1859, a tenacious entrepreneur named Edwin Drake struck a gusher after twenty months of toil in the poor western Pennsylvania town of Titusville. With it, he triggered the world’s first oil rush. In the wake of that discovery, a stern and lanky Clevelander named John D. Rockefeller cornered both the U.S. and European markets, earning him history’s first great oil fortune.
By the late 1860s, Rockefeller-led advances were revolutionizing the oil business, but production methods at Mr. Jaz’s property were substantially unchanged. The latest tenant on this land lacked almost any justification to invest in the new steam-driven wells because unlike his Pennsylvania counterparts, he couldn’t be sure he would be the one to profit. Russia, milking the state-owned fields for bribes as Persia had in the past, rotated tenants every four years to obtain fresh payoffs. Hence, Balakhani tenants had every reason to continue to dig and scoop, without bothering to refine, and sell as much oil as they could as fast as they could. The result was that Russia’s product was inferior in every way to Rockefeller’s, including price.
Three years after Drake’s discovery, a few tin containers of kerosene arrived in St. Petersburg. Their appearance might have gone unnoticed except that, improbably, they had traveled all the way from America.
Why would anyone finance an eight-thousand-mile shipment of kerosene when petroleum-rich Baku was so close at hand? The reason was simple. Nights were long for half the year in the Russian capital, and its people had to rely on malodorous tallow to relieve the darkness. The American kerosene was clean-burning by comparison, and tradition- bound Baku was producing only a relative trickle of kerosene. By 1870, gratified Russians were buying 250,000 gallons of U.S.-produced fuel a year, much of it from Rockefeller.
Russian scholars wondered how the United States, which had discovered its oil just a few years earlier, could so brazenly challenge the Empire in its own backyard. The answer, of course, could be found in the self-defeating and corrupt management of the Empire’s petroleum riches. Court ministers and the press urged Alexander II to act. The czar was no visionary, nor even very resolute, but after some dithering, he buckled. In December 1872, he ordered the auction of 1,240 desseatines—3,348 acres—of oil land. In that one act, Alexander wiped out much of the state’s suffocating hold on the industry and triggered a delirium that would itself spread all the way to upstart America. At first, there was panic in Baku. Somehow the mistaken impression had taken hold that all the region’s oil lay within these tracts. Thus, bidders feverish to obtain some of the supposedly limited supply drove up the collective price of the lands at auction by a factor of six.
Not surprisingly, authorities by and large rigged the process. Most of the successful “bidders” were senior officials favored by Alexander, and the remainder were Baku’s richest merchants. But there was one unlikely winner. The son of an illiterate shoemaker, he would learn to write his name only later, and even then the resultant signature more closely resembled a chicken scratch.
Zeynalabdin Tagiyev had neither great wealth nor influence. He had made his way in life as a master stonemason after a harsh boyhood in which he was apprenticed as a bricklayer at the age of ten. But by the late 1860s, as he reached middle age, he had achieved a modicum of success. He had a thriving business as a building contractor and owned two retail fabric shops besides.
Baku was not big, but as the main regional trading hub connecting the Persian, Ottoman, and Russian worlds, it did offer considerable opportunity to the observant. Tagiyev noticed some small yet fascinating changes in Baku’s rudimentary oil industry. One well-off oil field tenant had built a primitive refinery. Other, smaller operators were erecting more modest kerosene-making plants—each little more than a roof over a couple of stills, but for Baku, real progress. Tagiyev himself soon procured a simple, two-cauldron refinery.
The announcement in 1872 that the state would auction some of Alexander’s oil lands excited Tagiyev, and he and an equally exhilarated Armenian friend named Sarkissov agreed to enter into the bidding. But how could they hope to compete with Baku’s wealthiest and most influential figures? In particular, they were vexed by a contractor named I. M. Mirzoyev, who more than anyone had contributed to the auction hysteria. It was not that Mirzoyev was reckless—it was he who had the foresight to open Baku’s first refinery—but he was a bit overenthusiastic. He paid an astounding £254,000 for a 270-acre parcel—85 percent of all monies raised during the auction to buy 8 percent of the land. His tract was among the most highly prized, and no one begrudged Mirzoyev his right to disgorge his fortune this way. But in doing so, he disheartened the few ordinary bidders, such as Tagiyev and his partner, who could not afford to be so profligate.
Their chance finally arrived in the auction’s final hours, when the more dubious properties came on the block. The next-to-last parcel was especially suspect. It was a stretch of flatland called Bibi- Heybat, one thought so unlikely to contain hydrocarbons that the state had appraised it at a mere £57. But the participants’ zeal after Mirzoyev’s example was still intense, and they bid up the price, driving it to fifteen times its assessed value. Sensing that this might be his final opportunity, Tagiyev would not be denied. He bid £906. No one countered. Dubious Bibi-Heybat was theirs.
The oil field was next to a mosque, and “dubious” soon seemed a generous way to describe it. Tortuous months of extracting just a dozen barrels from time to time stretched into years. Finally Sarkissov lost patience and sold out to his partner.
Not until fourteen years after the auction did Tagiyev’s payoff come. But when it did, it arrived in a very big way.
On September 27, 1886, there was a rumble at Bibi-Heybat, and a gusher burst 224 feet into the air. It resembled “a colossal pillar of smoke, from the crest of which clouds of oil sand detached themselves and floated away a great distance without touching the ground,” the Baku News reported. The magnitude of Tagiyev’s strike was flabbergasting. Before it was contained, it spewed, and lost, more oil each day than was being extracted at the time by all other major petroleum-producing centers in the world combined—including America’s twenty-five thousand wells and those in Galicia, Romania, and Burma.
The mosque next door and nearby homes were drenched by the 3,500- barrel-an-hour shower of oil and rock. Even neighbors a mile and a half away were treated to the downpour. On the sixth day, a sudden thrust of crude saturated the square in front of the Baku Town Hall two miles from the well. Two days later, the flow was measured at 81,400 barrels every twenty-four hours. Authorities demanded that the well be capped, and on the fifteenth day Tagiyev’s engineers managed some semblance of control—they reduced the daily outflow to 7,000 barrels. “Altogether,” the Baku News reported, “close on 12 million puds [1.4 million barrels] are estimated to have come to the surface, and most of this was lost for want of storage accommodation. The oil simply poured into the Caspian Sea, and was lost forever to mankind.”
Before long, Tagiyev’s strike was making him among Baku’s wealthiest citizens. His oil, notable for its high quality, fetched twice the price of that extracted in Balakhani, where land cost up to five times as much. Tagiyev proved not only determined but clever and ambitious as well. He built a refinery to process his crude and a dock on the Caspian from which his own private tanker fleet could steam north to the mouth of the Volga River. Waiting there were Tagiyev-owned barges to ship his oil to customers courted by his own Moscow sales office.
Tagiyev became Baku’s most influential citizen, a dignified and deceptively quiet man with a bearded, open face and white hair who was astonishingly lean and fit. Peasants, workmen, robbers, and the crustiest oilmen all treated him with deference. When he appeared in public, he extended his hand, and people jostled to kiss it and addressed him as “Haji.” He was elected chairman of the city council and was decorated by the Emir of Bukhara and the Shah of Iran. Czar Nicholas II named him an honorary state councilor. Even after he left the city council, few people of consequence would pass through town without dropping by for tea with the oilman who after years of struggle had overtaken all the power brokers and generals to become Baku’s elder statesman.
Foreign visitors raved about the oil. Lewis Emery, an oilman from Bradford, Pennsylvania, found that Baku’s lamp oil, unlike that at home, produced no smoke when it was burned. British journalist Charles Marvin reported that Baku oil was less dangerous as well, its flash point at 88 degrees, some 20 degrees higher than the American varieties. Other American visitors found the fountains of oil roaring skyward most thrilling. Some recalled that, in the Titusville boom, a few hundred barrels a day was a bonanza. But in Baku, a well called Vermishev spewed oil for four solid months, its stalk forty feet tall and nine feet in diameter.
Top Customer Reviews
There is a major focus on the personalities involved, backed by interviews with nearly everyone written about. At the same time that can be considered the only mark against the book; it is very personality-based, and at times feels like its an attack on a few select people. I would also have liked to see more information about the effects it had on the Caspian states themselves, but I realise that can be difficult with their reluctance to contribute in something that would be critical of their regimes. It also seems rather short considering the magnitude of the subject; an extra 100 pages of details would certainly not have hurt.
As well, as the book was published in 2007, it is obviously unable to include the 2008 Russia-Georgia War and the repercussions of that conflict. So if you are looking for that, you will have to read other material.
Overall a decent book that helps explain why the Caspian region is as it is in regards to oil and natural gas.
Most Helpful Customer Reviews on Amazon.com (beta)
LeVine's The Oil and the Glory, like the Yergin's The Prize, is destined to be required reading for those wishing to understand how oil, while vital, is sometimes described as a curse.
Especially enjoyable are the descriptions of the major oil company execs, rather different from what company spin doctors offer (but for those of us who knew or knew of them, accurate)... Also good are the profiles of Jim Giffen and John Deuss, the kind of people I thought only existed in fiction...
Mr. LeVine has reported for the Wall Street Journal, Financial Times, New York Times and others, and has done a brilliant job capturing the past and present history and adventures (and adventurers) in what is one of the most important oil provinces in the world.
But beware -- once you start reading this book, it's pretty hard to put it back down in order to eat, sleep, or do other activities that normally occupy one's time...
What could have been told as a good guy / bad guy tale is instead described as a multi-player chess game, engaged on a multi-sided board of shifting squares and re-invented principals. International state teams vie with international self-serving teams of private and public corporations. Players drop allegiances and trade sides, stakes shift with the political winds, agreements forged over months fall flat overnight. Levine circles around the table examining the team players, gathering their play books. He unveils how various deals grow and then collapse forcing the players into new rounds. It is not often that one is given an inside look at how governments and businesses "play" together to reach their aims, which are often not similar. Here we are pulled into the backrooms where such "play" takes place. This particular chapter of oil history is extremely engaging and well told. May whoever writes the next chapter do so with the clarity and detail of Mr. Levine.
Steve LeVine's "The Oil And The Glory" is a gripping tale of one of the world's most strategically important, yet virtually unknown parts of the world. Over the past 15 years this area has been completely shaped by Big Oil's hunt for resources, American and Russian governments battle for geopolitical influence, and independent dealmakers quest to get rich. What I liked about this book is that it's a first-hand account from guys that were there to explain how these forces shaped the region.
What initially piqued my interest in the book was 5 years living in the former Soviet Union. We heard bits and pieces that alone ended up in Bond movies (not to mention Borat). But now with oil at $90 and huge quantities from the region beginning to come on the market, the Caspian Sea is clearly becoming more strategically important. Steve's book provides right amount of historical context to help better understand these events, and his lively style, with vivid descriptions and fast pace held me until the end.
As the other reviews have said: This is an always enjoyable, sometimes down right exciting, book to read. Great storyline, larger than life characters, exotic locales, unexpected plot twists, bribes, money and intrigue, double dealing and betrayal, suspenseful to the end. Who can beat that? I couldn't put it down.
This is not a book without substance though, to be dismissed or underestimated. It is a well documented serious piece of work. The notes, acknowledgments, and bibliography at the back of the book attest to the time and commitment made by the author. He has used available written source materials, but more importantly has gone straight to the sources themselves, relying upon an extensive number of interviews that he conducted himself with the players directly involved. "The Oil and the Glory" goes to the most intimate levels of this story bringing the people and the events alive for us in the telling.
I learned a lot reading this book. And enjoyed every minute of my education.
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