A great struggle began over the right to continue the oil business, which completely absorbed all of Ardalion Novosiltsev’s energy. Petitioning the government, he wrote: “After expending considerable capital on preliminary surveys, I have become convinced that an enormous quantity of oil can be produced there via artesian wells. Experience on the Kudako River has brilliantly justified my hopes. There, a continuous stream of petroleum erupts to a height three sazhens [21 feet] above the ground’s surface from an artesian well 40 sazhens [280 feet] deep, which produces up to 10,000 poods [1,200 barrels] per day. I am proud that after expending much energy, labor, and money, I have been lucky enough to find such government riches, which will shortly constitute a new and very important source of state revenue. I have no doubt of success, but a shortage of funds could hinder me. The whole business rests on me alone, and the public is observing the business closely, seeing all its enormity, but has still not decided to help develop it.”33
In response to his request, a Senate decree arrived in May 1871 entrusting Col. Novosiltsev’s business to a special agency, a Trusteeship consisting of representatives of the Ministries of Finance and Internal Affairs, as well as creditors. The Trusteeship established relations with the Kuban Host by executing a 10-year contract, good through May 1, 1882, for monopoly rights to develop oil fields on the Taman and other lands previously allocated to Novosiltsev. Thus, Novosiltsev found himself removed from the everyday management of the considerable oil holding. In July 1876, the Board of the Kuban Cossack Host, in describing the Phanagoria Refinery, declared it Host property.
Through difficult negotiations, Col. Novosiltsev and officials of the chancellery of the governor general of the Caucasus in Tiflis (Tbilisi) managed to suspend this decision. Novosiltsev then began desperate attempts to win at least one more deferral of a debt repayment due by January 1, 1879. In an appeal to Emperor Alexander II dated October 30, 1878, Ardalion Novosiltsev wrote: “In striving to develop such an important domestic industry as the oil business, I have sacrificed not only my own fortune, but diverted considerable capital of private individuals, and even dared to resort to the august support of Your Imperial Majesty. The satisfaction of this obligation, sacred to the honor of a nobleman, has been the goal of my entire life, but now this business, brought to a productive end by many years of great sacrifice, could completely collapse.”34
However, a brief deferral of payment by “Imperial mercy” proved unable to save him, and the business tragically unraveled. On December 6, 1878, in Simferopol, Ardalion Novosiltsev passed away unexpectedly. He was later buried at the cemetery of the Alexander Nevsky Monastery in St. Petersburg.
The First Oil Well in the Russian North
Widespread coverage of the Kuban oil gusher and the exploitation of resources in that region created a sensation throughout the Russian business community. However, oil prospecting in the resource-rich Ukhta District would not begin in earnest for another 20 years. Leading this new phase of the development of the Russian oil industry was Mikhail K. Sidorov (1823–1887), a trailblazing and devoted proponent of the exploration of the Russian North.
Mikhail Sidorov’s diverse capabilities and long history of devoted work earned him a worthy place among leading entrepreneurs of Krasnoyarsk and Yenisey Province. In 1859, he outfitted an expedition to the Turukhan Territory, where he discovered the first Siberian graphite deposit near the Kureyka River. Together with Vasily Latkin, he founded the Pechora Company to carry out field production and commercial operations in the Russian North. In 1860, his expedition discovered gold placers near the Shchugor River.
The productive operations of the Pechora Company were very evident to the residents of the territory. In 1864, forest Warden P. F. Gladyshev wrote a letter to Sidorov informing him of surface petroleum outcrops found in the Mezen District, Arkhangelsk Province. That same year, Mikhail Sidorov undertook a trip to the area and, together with local surveyors, he inspected the prospect parcels near the Ukhta River. The results of the trip were encouraging.
Incidentally, it is quite possible that Sidorov was also aware of the results of an expedition 20 years earlier to the Ukhta. In 1843, a geologic and geographic expedition consisting of geologist Alexander Keyserling (1815–1891) and researcher Paul Krusenstern (1809–1881) operated in the Pechora Territory. Over a period of six months, they traveled more than 4,620 miles from the headwaters of the Pechora to its mouth, performing various scientific studies. The result was the first geologic map of the Timan Mountain Range. Summarizing the results of the expedition, Keyserling published the book Wissenschaftliche Beobachtungen auf einer Reise in das Petschora-Land, im Jahre 1843 [Scientific Observations on a Trip to the Pechora Region in 1843] (1846), which contained numerous references to Ukhta petroleum.
After his visit and inspection of this oil-bearing area, Sidorov sent an application for three oil-bearing parcels with the hope that “the government will not deny the first applicant its sympathy for his laborious undertaking in this harsh, uninhabited, and roadless land.” But yet again, the hopes of an entrepreneur were dashed. Officials at all levels created all manner of impediments to his request, sometimes rationalizing their denials with the most ludicrous excuses. For instance, correspondence from the Arkhangelsk Province administration stated that: “Based on the Mining Charter now in effect, prospecting for gold, silver, and copper is permitted in the Olonets Province and Arkhangelsk Province (Articles 2253–2257); but regarding other minerals such as oil shale and petroleum, the Mining Charter contains no legal provisions or regulations.”
Meanwhile, following his return from a trip to the United States, mining engineer Gennady Romanovsky made a report to a general meeting of the Mineralogical Society in St. Petersburg in 1866, in which he expressed the very perspicacious supposition that the geologic structure of the main American oil-bearing area in Pennsylvania was similar to that of the Ukhta District, and that there might be large reserves of “black gold” there.
This news from the capital and Sidorov’s unquenchable insistence on obtaining land parcels on the Ukhta elicited interest among officials in developing the North’s oil industry. In particular, Arkhangelsk Governor Prince Gagarin had a great desire to gain the laurels of the first discoverer of an oil field in the North. To this end, he decided to form a provincial company to investigate natural riches and allocated 1,000 rubles for various types of oil exploration work. In the summer of 1867, under the observation of the commission’s members, Arkhangelsk Statistical Committee secretary Pavel Chubinsky, and Arkhangelsk high school natural sciences teacher Fëdor Belinsky, a well 232 feet deep was drilled by manual rotary means from a wooden platform located 28 miles from the mouth of the Ukhta River. This well showed only signs of the presence of petroleum. Then a second well was drilled in rocks on the banks of the Chut River, 1.9 miles from where it empties into the Ukhta; again, only showing traces of petroleum. The drilling results, presented in the commission’s report, disappointed the governor. Convinced of the poor prospects of further exploration, he lost interest in petroleum.
The chief impediment having apparently been removed, Mikhail Sidorov gained the long-awaited permit on August 9, 1867: “As a consequence of the Minister’s assent, the clarification of the Temporary Section’s proposal 8153 of June 20, and the Governor’s message 3084 of July 26, the State Property Administration authorizes you to develop petroleum and oil shale in the Mezen District, at the location you specified, 40 versts [26.4 miles] from the mouth of the Ukhta River where it empties into the Izhma River, for a 20-year period, in exchange for payment, for each desyatina [2.75 acres] of land occupied, of quitrent in the amount of the mean per-desyatina [per-2.75 acres] fee prevailing in the Arkhangelsk Province.” However, it took almost another year to overcome bureaucratic inertia and indifference and for work to begin on the allocated oil-bearing parcels. In the mid-summer of 1868, a crew outfitted by Mikhail Sidorov, led by experienced miner P. A. Lopatin, began development operations on the left bank of the Ukhta River opposite the mouth of its Neft-Yol River tributary, and within several months it had already drilled the first productive oil well in the Russian North.