Naturally, work in this area required a fundamentally new approach to the organization of the business. A report by mining engineer Gennady Romanovsky indicates that a 7.4-horsepower mobile steam engine, a so-called locomobile, was being used in these fields. Col. Novosiltsev began drilling his first wells in 1864 at the sites of surface oil shows, initially near Anapa and then at the village of Staro-Titarovskaya and the town of Fontanovsky. The drilling was done by a crew of American specialists specially invited from the United States, headed by foreman G. Clay.
Russia’s first oil exploration began with drillholes using mechanical percussion drilling and the casing of wells with metallic casing pipe. However, these attempts at exploratory drilling by the conventional American method of “wildcatting” proved unsuccessful—all three holes were “dry.” In addition, the excessive ambitions of the foreign specialists and their attempt to dictate unacceptable terms predictably forced Col. Novosiltsev to terminate their business relationship.
On the recommendation of mining engineer Friedrich von Koschkull, Col. Novosiltsev decided to concentrate exploratory work in the area of the Kudako, Psif, and Psebeps tributaries of the Kuban. On the advice of Lieutenant General Grigory Gelmersen, director of the St. Petersburg Mining Institute, he hired the Russian specialists Vladimir Peters, a mechanic who had proven himself an experienced driller of artesian wells, and Karl Sikorsky, who was qualified as an experienced pipe-fitter.
In August 1865, drilling of five wells began on the left bank of the Kudako River, 26 miles from Anapa. When oil inflows appeared at a depth of 40 feet, drilling was continued at even greater intensity. Finally, on February 3, 1866 (February 15, New Style),30 at a depth of 123.5 feet, they struck Russia’s first oil gusher in Well No. 1.
An archive document of February 5, 1866, “Report to the Commander of Adagum Regiment,” contains the following description of the event: “Supplementing my Report 14 of November 18 in response to your Reply 6246 of November 5, please be advised that on my last trip to the Kudako area, after incredible efforts, this February 3rd we broke through a rock, and a strong jet of pure oil opened up with an extraordinary noise, yielding from 1,500 to 2,000 vedros [116 to 155 barrels] every 24 hours through pipes alone, without the assistance of the locomobile or any effort by the workers. I bring this to your attention for reporting to whomever you see fit. Vladimir Peters.”31
The gusher from Well 1 continued unabated for 24 hours, after which the oil inflow decreased somewhat, but on April 14, when drilling reached 242 feet, an even more powerful gusher occurred, which continued for 28 days. The Kudako oil had a somewhat unusual greenish color and an acrid sulfurous odor. According to the calculations of mining engineer Friedrich von Koschkull, this first gusher in the Kudako River field yielded some 12,000 barrels of oil.
In the summer of 1868, mining engineer Gennady Romanovsky visited the oil field for the first time. He made a very detailed description, drew up a general plan, performed a feasibility study, and presented specific recommendations for further work. His status report on the Kudako field was published in the Gorny zhurnal. In his conclusion, he noted: “In speaking of the beginning of development and establishment of the oil business in Kuban Region we cannot overlook the services of Colonel Novosiltsev, who has surpassed many with his energy and labors.”
Kuban oil became a major increment in fulfilling Russia’s oil production objectives. Whereas Russia produced only 66,875 barrels of oil in 1865, its production volume more than tripled in 1870, to 204,685 barrels. In that year, Col. Novosiltsev’s Kuban fields yielded 28,840 barrels, or 14% of Russia’s total oil production volume.
The Tragedy of the “Russian Oil Craze”
Ardalion Novosiltsev’s mighty oil gusher in the Kuban and his subsequent energetic activities were widely covered in the Russian press, with many newspapers even dubbing the phenomenon the “Russian Oil Craze.”
In order to refine the massive amounts of oil produced by the gusher, Col. Novosiltsev built the biggest refinery of the day, with an annual capacity of up to 61,891 barrels of kerosene, on the grounds of the old fort of Phanagoria on the shore of the Kerch Strait in 1869. The refinery’s equipment was made in factories in Glasgow (Great Britain) and incorporated state of the art technology for that time. The refinery had 20 steel distilling vats for oil, each with a volume of 4,881 gallons. The vats were surrounded by a cooling system with helical tubes seven inches in diameter. Crude oil was pumped into two tanks mounted on towers, where it was allowed to settle. It then flowed by gravity into the distilling vats. After distillation, the petroleum products were sent to a separating department, where the finished products were graded by specific gravity and distributed to corresponding underground tanks, from which they were pumped to purifiers. Mixers in the purifiers were driven by a 40-horsepower steam engine.
In 1876, Professor Konon Lisenko of the St. Petersburg Mining Institute visited the refinery and, in an article in Zapiski Imperatorskogo Russkogo tekhnicheskogo obshchestva [“Transactions of the Imperial Russian Technical Society”], observed: “With its location on the shores of a strait connecting the two seas that wash the shores of Southern Russia, and its proximity to the Kuban oil fields, Mr. Novosiltsev’s Phanagoria Refinery has no equal in terms of its advantageous industrial conditions. But it also differs from all refineries I have seen in: 1) its distillation system; 2) the special arrangement of certain parts of the refinery; and 3) the elegance and high-quality finishing of all individual devices.... It seems to me that in some respects it could serve as a model for refineries in the Baku area.”
The sophistication of the technological process at the Phanagoria Refinery was also noted by the respected specialist and production engineer Aleksandr Letny: “Oil produced in the Northwest Caucasus was refined by Mr. Novosiltsev’s Taman refinery. In its time, this refinery performed distillation with superheated steam and produced petroleum ether and light and heavy lamp oils.” In 1870, mining engineer Gennady Romanovsky also visited the enterprise and wrote: “Order, cleanliness, and activity characterize the entire refinery.”32 In 1871, the refinery produced 612 barrels of “petroleum” (heavy kerosene), 632 barrels of photogen, 323 barrels of ligroin, and 3.6 barrels of gasoline, and earned 44,072 rubles from the sale of its petroleum products.
At the 1870 All-Russian Manufacturing Fair in St. Petersburg, Col. Novosiltsev presented the results of his labor to the general public for the first and only time. The fair catalog gave a brief description of the refinery: “The refinery was founded in 1868. Distillation is carried out with superheated steam in 20 vats with capacities of 1,500 vedros [4,881 gallons] each. Mixers and pumps are driven by a 40-horsepower steam engine, and water is lifted by a special 10-horsepower steam engine. Up to 60 people work at the refinery.” The refinery’s booth exhibited “crude oil and tar, mineral oil, photogen, petroleum, ligroin, gasoline, heavy oil, carriage grease, and lubricants.”
However, the close of 1870 was marked by a serious setback for Ardalion Novosiltsev. On December 27, the first oilfield fire in Russian history broke out at his field in the Natukhay District. While drilling a well at 123 feet, workers struck a gusher of gassy oil. The firebox of a steam locomobile operating near the rig ignited a huge fire, causing human casualties and considerable material losses.
The approaching expiration of the tax-farming agreement in 1872 and a serious deterioration in Col. Novosiltsev’s financial position left no room for the realization of his expansive plans for development of the oil business in the Kuban. First he was denied a contract to lease oil-bearing lands near Maykop, and then the land of his main field was transferred by “Imperial Grant” to the “Subjugator of the Caucasus,” Infantry General Nikolay Yevdokimov, beginning in 1872.