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Baku's Oil Glory, From Stalin To The Rothschilds And Nobels

The old city of Baku
The old city of Baku
Richard Werly

BAKU — Amid the crashing and banging of dumpster trucks loaded with ballast, Fazil Gazi is a prime witness to one of the most famous oil hills in the world as it enters a new era.

In all the books dedicated to the black gold of the Caspian sea, this maze of small streets with rutted sidewalks, still congested with old Ladas and Soviet buses, had an evocative nickname: “Black City.” That’s because just below Fazil’s humble home in Baku, Azerbaijan, there was nothing but petroleum.

“The ground was black. Workers had their bodies covered with stinky oil while clouds of filthy smoke covered everything else,” says Fazil, who is now a quantity surveyor on Baku’s most emblematic construction site. “The smell of petroleum was everywhere.”

But forget about “Black City” and say hello to “White City,” a massive shopping mall under construction that will reproduce the architectural extravagance of Dubai, the emirate that the black-gold-endowed current Azerbaijan regime wants to imitate.

Petroleum and gas has been extracted by multinationals such as BP, Total or ENI in the fabulous offshore platforms of Azeri–Chirag–Guneshli and Shah Deniz since the late 1990s. The oligarchs recycle their revenue into luxury shops and residential buildings. As the city glitters in the autumn night, President Ilham Iliev basks in the glow of his Oct. 9 re-election to a third term, despite aggressive marginalization of the opposition and persistent human rights abuses.

The European countries, who depend on Azerbaijan for part of their energy and welcome its investments, are sparing the Westward-looking Azeri regime, stuck halfway between Russia and Iran. Although petroleum serves mostly the elite in power, it nevertheless creates growth, which in turn creates jobs and higher standards of living.

A colorful history

Baku, however, has more to offer than simply this Dubai-like shopping window. The history of the city is inseparable from the oil that became indispensable to the industrial world in the late 1800s and that has been springing from the soil since time immemorial. Baku has seen some major historical moments. There were the years between 1906 and 1910, for instance, when a certain Georgian revolutionary named Ioseb Jugashvili, also known as Stalin, conspired in bars as dark as the soot that covered them with workers from the fields of Balakhani and Sabunchi, on the oil-producing Absheron peninsula.

[rebelmouse-image 27087534 alt="""" original_size="500x349" expand=1]

The Nobel Brothers' oil facility around 1900 — Tekniska museet

Baku is an oil city. These words are written all over the place, like on the white wall that still circles the old part of the town built on the top of the Black City by the Nobel brothers, Ludvig and Robert. The Nobels’ “Villa Petrolea,” overlooking the Caspian shore that back then was adorned with an entanglement of traditional derricks and wells activated by harnessed horses, was a symbol of the success and vision of the Swedish brothers who had come down from Saint Petersburg. Their third brother Alfred, inventor of dynamite and father of the Nobel prizes, stayed behind to take care of the family’s armament company at the service of the Tsar.

In the meantime, Ludvig and Robert, who had initially come to Baku to look for wood in the forests of South Caucasus to make gunstocks, swore only by black gold.

“Villa Petrolea was the embodiment of their plans as big-time capitalists who were already globalized,” explains historian Parvin Ahanchi, archivist for the oil giant Socar. “They lived for nothing by hydrocarbons: how to refine them and transport them — first on camelbacks, then with their first oil pipeline built in 1878. And finally how to export them — on their first oil tankers, the Zoroaster and its sister-ship the Nordenskjöld.

[rebelmouse-image 27087535 alt="""" original_size="499x333" expand=1]

Baku's port — Photo: David Davidson

“Between 1879 and 1918, the Petroleum Production Company Nobel Brothers (Branobel), played for the rest of the world a role similar to that of Saudi Arabia.”

Now the Villa Petrolea is nothing more than an isolated, almost abandoned relic of this first oil boom whose theater was Baku. All that remain behind the freshly painted surrounding wall are the Nobel mansion — renovated by Sweden — the small park adjacent to the house where a barbecue restaurant established itself, and an ill-kept garden decorated here and there with bronze chests to the glory of Russian engineers of the 1950s.

Before the Nobels

To understand the changes in Baku, one must go to the museum at the former Taghiyev palace. Hajji Zeynalabdin Taghiyev is there, on one of the sepia pictures exposed in the dining room of his palace.

[rebelmouse-image 27087536 alt="""" original_size="500x352" expand=1]

The Nobel Brothers' oil facility in Baku — Photo: Tekniska museet

“Between the 1880s and 1900s, Baku belonged to the Nobels, the Rothschilds and more generally to the British financiers,” explains historian Leila Aliyeva. “But those who really shaped it were the Azeri oil barons like Taghiyev, Musa Naghiyev or Murtuza Mukhtarov.”

Taghiyev’s story is eloquent. He started as an illiterate farmer. Then, in 1872, he managed along with a few others to buy oil-rich patches of land that the Tsarist administration was auctioning for the first time, and almost immediately made a fortune. Beyond its outside wall, the medieval Ottoman old town of Baku was surrounded by avenues with tramways where there were huge and expensive mansions, shops, and official buildings of European style constructed by French, Polish or German architects.

[rebelmouse-image 27087537 alt="""" original_size="500x375" expand=1]

Baku's old town — Photo: David Brewer

Under the surveillance of the Tsar, Taghiyev and his peers became the masters of a cosmopolitan town were Turkish, Jewish, Russian and Armenian people gathered. The registers of some 2,000 workers from Branobel, found by the historian Parvin Ahanchi, tell the story of this multi-ethnic and multi-religious “Oil Babel,” where in the mud of the derricks workers spoke Persian, where the supervisors spoke Russian, the bankers English, the diplomats French.

The Nobels controlled one-third of the oil production despite the 30 different companies sharing the market. Baku prospered before animosity between Azeris and Armenians degenerated into massacres in 1905. But the city became emancipated: “Taghiyev was the first to finance a girls’ school, where my great grandmother went,” says the historian Leila Aliyeva.

Other magnates launched newspapers or built libraries. “At the beginning of the 20th century, it went from a military town to a modern European metropolis,” says Anar Valiyev, with Azerbaijan’s diplomatic academy.

[rebelmouse-image 27087538 alt="""" original_size="500x280" expand=1]

Baku around 1900 — Photo: Tekniska museet

The peak occured with the Russian revolution of October 1917. A few months later, Azerbaijan gained its independence, and Baku became the capital. A parliament was established, and the oil magnates, including Taghiyev, financed this market democracy. “These philanthropist billionaires understood that freedom and education could earn them a lot,” Aliyeva explains.

Could black gold really have been a means of emancipation, considering how it led to so much oppression, corruption and destruction in other oil-producing countries since then? “What happened in Baku is unique: Our oil was civilizing,” she says, disgusted by the overdone construction of the current regime, known for buying itself a respectability by throwing money around.

Although an oil museum was considered for a time, it seems that it will not come to be. Taghiyev was dispossessed of his land when the Soviets took power in 1920 and died in his provincial dacha four years later. Ludvig and Robert Nobel, who died respectively in 1888 and 1896, did not live to see their company Branobel nationalized in 1920.

Oil is still being pumped out of Baku's heart, but the dreams of the Villa Petrolea are history.

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FOCUS: Russia-Ukraine War

How Vulnerable Are The Russians In Crimea?

Ukraine has stepped up attacks on the occupied Crimean peninsula, and Russia is doing all within its power to deny how vulnerable it has become.

Photograph of the Russian Black Sea Fleet headquarters with smoke rising above it after a Ukrainian missile strike.

September 22, 2023, Sevastopol, Crimea, Russia: Smoke rises over the Russian Black Sea Fleet headquarters after a Ukrainian missile strike.

Kyrylo Danylchenko

This article was updated Sept. 26, 2023 at 6:00 p.m.

Russian authorities are making a concerted effort to downplay and even deny the recent missile strikes in Russia-occupied Crimea.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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Media coverage in Russia of these events has been intentionally subdued, with top military spokesperson Igor Konashenkov offering no response to an attack on Russian Black Sea Fleet headquarters in the Crimean city of Sevastopol, or the alleged downing last week of Russian Su-24 aircraft by Ukrainian Air Defense.

The response from this and other strikes on the Crimean peninsula and surrounding waters of the Black Sea has alternated between complete silence and propagating falsehoods. One notable example of the latter was the claim that the Russian headquarters building of the Black Sea fleet that was hit Friday was empty and that the multiple explosions were mere routine training exercises.

Ukraine claimed on Monday that the attack killed Admiral Viktor Sokolov, the commander of Russia's Black Sea Fleet. "After the strike on the headquarters of the Russian Black Sea Fleet, 34 officers died, including the commander of the Russian Black Sea Fleet. Another 105 occupiers were wounded. The headquarters building cannot be restored," the Ukrainian special forces said via Telegram.

But Sokolov was seen on state television on Tuesday, just one day after Ukraine claimed he'd been killed. The Russian Defense Ministry released footage of the admiral partaking in a video conference with top admirals and chiefs, including Defense Minister Sergei Shoigu, though there was no verification of the date of the event.

Moscow has been similarly obtuse following other reports of missiles strikes this month on Crimea. Russian authorities have declared that all missiles have been intercepted by a submarine and a structure called "VDK Minsk", which itself was severely damaged following a Ukrainian airstrike on Sept. 13. The Russians likewise dismissed reports of a fire at the headquarters of the Black Sea Fleet, attributing it to a mundane explosion caused by swamp gas.

Kremlin spokesman Dmitry Peskov has refrained from commenting on the military situation in Crimea and elsewhere, continuing to repeat that everything is “proceeding as planned.”

Why is Crimea such a touchy topic? And why is it proving to be so hard to defend?

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