BUSINESS
Who were the first Georgian oil producers – Prominent figures of 19th century
24 July, 2017
When and where was the oil produced in Georgia, how the legendary Siemens brothers were involved in this business and who were the Georgian pioneers in this field - historian and political scientist, professor Vazha Shubitidze unveils some of the interesting facts concerning this topic.

- Today, oil ownership determines the great income and development of the countries. We see how our neighbor Azerbaijan goes forward in this direction. What is the contribution of Georgians in the Baku oil exploitation?

- Before I answer, I want to tell you that I have recently released a very interesting book (authors - professors Mamuka Jolbordi and Nino Liparteliani) "Agricultural and Charitable Activities of Georgian and Foreign Entrepreneurs in Georgia" (XIX-XX). You will discover many new factsin this book. Before starting serious oil production in Baku, oil was extracted and processed in Shirak, Mirzaani and Shirak Valley in Georgia’s kakheti region.

In 1848, Mikhail Vorontsov leased all oil fields. In the 1860s, among the owners of these fields were Siemens brothers, who produced 173 thousand buckets of oil from Kakheti oil fields in 1875 alone.

Siemens brothers
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From the 1880s, active process of oil production started on the Apsheron Peninsula (Azerbaijan), which prevented oil extraction in Georgia and since 1902 this type of production was completely suspended. Together with the American Wilson, brothers Nobles were interested in Baku's oil production and in setting up the pipeline to Batumi. Ludwig Nobel created a syndicate and requested to carry the raw materials through Surami's 4-kilometer tunnel. He was supported by a great chemist Dmitri Mendeleev.

In 1903 the pipeline was built (1935 km long 19 pumping station). The pipeline capacity was 900 thousand tons per year, costing 12 million Russian rubles. Alfred Nobel's 400 tons of dynamite was used during the construction works. As a reminder, the tanks set up by the Nobel brothers are still in Batumi. Additionally, there is the Nobel's Technology Museum in Batumi as well.

Nobel brothers
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Soon the Nobels gained a monopoly on Baku's oil production and the local and Russian capitalists were oppressed by them. Niko Nikoladze (Georgian writer, pro-Western enlightener, and public figure) wrote a report about it, then presented a report in St. Petersburg and finally caused controversy between Nobels and Rothschilds, who were invited to Georgia by him. Rothschilds invested 10 million dollars in this field and allocated credits for the construction of the oil production factory in Batumi. They founded the "Caspian and Black Sea Oil Company" and in 1889 they were pioneers who started to carry oil using tankers (before the oil was carried by wooden barrels and iron bidons).

In 1886, Rothschild’s Parisian banking house purchased the "Batumi Oil and Trade Society” . The director of the Rothschild’s factory in France was French Gión, who employed only Georgians. In his opinion, Georgians were the most honest workers, and they always did their job in time. In total, 2650 workers were employed in the factory.

-Exactly, what was the role of Georgians in Baku's oil exploitation?

- By the way, the competitor of Rothschilds and Nobels in the oil production was Mantashev, who was born and raised up in Tbilisi (died in 1911). He built a sheet iron factory in Batumi and became the owner of 200 cisterns (his capital was 22 million rubles).

Alexander Mantashev
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Almost 1800 people worked in Alexander Mantashev's enterprises. He was also famous for his charitable activities. With his expenses were opened: a trade school, a retirement home, hotel "Beau-Monde", a school for underage criminals and private libraries. He also installed a telephone cable from Sololaki to Didube districts, which was a novelty and luxury at that time.

I.Pitoev

I.Pitoev was another important figure in oil business. He was born and raised in a rich family in Tbilisi. He owned a company and transported oil by ships over the Caspian Sea. In 1901 he built a beautiful building, which was called" Pitoev’s House". Nowadays, famous Rustaveli Theater is located at that place. He greatly assisted the Tbilisi State Theater (Paliashvili Opera and Ballet Theater) several times and in 1887 he became the director of the theatre.

Konstantine Zubalashvili

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In the 1860s, Konstantine Zubalashvili, famous Georgian businessman and philanthropist, purchased lands for oil production and in 1873 he started went into the oil industry. He bought land in Bibieibat, which no one expected to be oil-rich. However, Zubalashvili turned out to be very lucky in this case.

In 1873, brothers Jakeli founded the first barrel factory to transport the oil products, for which the necessary equipment was brought from Marseille. In 1880 they founded the oil-industrial and trade partnership, which was producing and transporting oil.

Georgian entrepreneur Iakob Mansvevashvili , friends with Noe Zhordania, was known for the production of oil products in Baku.

In the South Caucasus, Georgian entrepreneur and philanthropist Akaki Khoshtaria, knew Churchill and Roosevelt in person, became famous for his work in the production and transportation of oil products. He was close to Iran’s Shah Mohammad Reza Foodeh and his successor Ahmad Shah.

Zurab Avalishvili called him “the American-style businessman. ”He was an excellent gardener-decorator, and then he became an entrepreneur. He decided to transfer oil to Odesaby through merchant vessel.

Because of the harsh storm near Tuapse the ship ended up in Turkey, where they sold the oil at high price. Akaki bought equipment for oil producing in Baku from a millionaire Musa Nagiev and became a big businessman.

In 1907, Akaki Khoshtaria received the right of producing oil in 5 provinces of Iran from Iranian Shah. He set up the first railway in Iran, also he was the first one to export cars to Iran, he owned a monopoly on soap, fish producing and was involved in wool trade.
Khoshtaria funded a number of projects of Georgia, purchased 4 ships in the US and Italy, and handed them over to the government to create a naval fleet. In 1914 he purchased Georgian philanthropist and cognac producer Sarajishvili’s house at the auction and handed it over to Georgian writers to arrange the home of art in 1919.

Akaki Khoshtaria
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Apart from that, dozens of Georgian students studied abroad (Paris and Berlin Universities) thanks to the scholarships of Akaki Khoshtaria gave to them. Additionally, Makhinjauri Botanical Garden and New Athos (Akhali Atoni) Central Park were arranged at his expenses.
He sent 8 thousand rubles to the newly created Historical-Ethnographic Society from Baku. He set up railway line from Poti to his native town Abasha under Niko Nikoladze's initiative. He also made significant contributions to the Georgian University (TSU) and Theater (50 thousand rubles). Akaki purchased paintings of Lado Gudiashvili and famous cubist André Lot in Paris and presented them to the Art Museum of Georgia. Akaki Khoshtaria died in Paris aged 59.

Author: Manana Gabrichidze

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