Baku and the Rothschilds: Achievements and architectural legacy. Part I A historical overview by Caliber.Az

In the second half of the 19th century, Baku became one of the world’s most important oil centers, attracting the largest financial and industrial dynasties of Europe. Among those who played a key role in the development of the city’s infrastructure, oil production, and international trade in Baku oil, the Rothschilds held a special place. Their investments and engineering initiatives contributed to transforming the city into a global hub of the oil industry and had a noticeable impact on its economic and architectural landscape.

The development of Baku during this period was marked by remarkable dynamism, comparable to the growth rates of the world’s largest industrial centers. The city expanded rapidly, attracting engineers, architects, financiers, and entrepreneurs from various countries. International capital was actively involved in the development of the Caspian oil fields, and the participation of the Rothschilds became one of the most striking examples of how Baku oil was integrated into the global financial and industrial system.

The Rothschilds’ entry into Baku’s oil business was linked to the construction of the Baku–Batumi railway line, which had strategic importance for oil exports.

In the late 1870s, the project was initiated by industrialists Andrei Bunge and Sergei Palashkovsky. However, a sharp decline in global oil prices during the height of the construction led to severe financial difficulties and brought the project’s initiators to the brink of bankruptcy.

Seeking support, Palashkovsky turned to the Paris branch of the Rothschild family, which had considerable experience in financing railway projects and controlled a large oil refining enterprise on the Adriatic. The head of the French line of the dynasty, Mayer Alphonse de Rothschild, who had led the Paris banking house since 1868, showed strong interest in the prospects of Baku oil. This marked an important stage in the integration of the region into the international financial and industrial system.

Baron Alphonse Rothschild, who took on the completion of the railway, received in exchange the right to preferential ownership of oil enterprises in Baku. The loan provided by the Rothschilds made it possible to complete the Baku–Batumi railway line by 1883.

In 1886, on the basis of the Batum Oil Industrial and Trading Society (BNITO) founded by Bunge and Palashkovsky, Alphonse de Rothschild established the Caspian–Black Sea Oil Society, which soon became the second-largest company in the Baku oil region. The company acquired extensive oil-bearing lands in Balakhani, Sabunchu, Ramana, Bibi-Heybat, and Surakhani, where development and exploitation of the fields began immediately.

With 6 million gold rubles and 25 million francs of share capital held in Baku reserves, the Rothschilds approached the enterprise with characteristic energy and scale.

The trial voyage of the tanker vessel Ferguson from Baku to Antwerp marked an important milestone. Within less than a year, the first shipment of kerosene was sent to London, and distillates were exported to Austria. Subsequently, kerosene, packed in specially designed tin, hermetically sealed containers, began to be supplied to Türkiye, and from 1885 onward reached markets in the Far East and across the world.

The Rothschilds had numerous achievements in Baku’s oil industry. Among them are projects that not only transformed the city’s industrial landscape but also became symbols of advanced engineering thought of the time. Their initiative, financial support, and strategic involvement contributed to the formation of modern oil infrastructure in the Absheron Peninsula and elevated Baku onto the global stage of the oil industry.

One such project was the main oil pipeline. By the end of the 19th century, 38 oil pipelines were operating in Absheron with a total length of 390 versts, which demonstrated the need to connect Baku and Batumi with a unified system for transporting oil to the Black Sea.

The Rothschilds secured the right to construct this pipeline, financed a significant portion of the work, and supported the outstanding engineer Vladimir Shukhov.

A decade later, on July 24, 1907, the main oil pipeline was officially inaugurated, becoming the largest engineering achievement of the region.

The development of oil resources hidden beneath the Caspian Sea floor in the Bibi-Heybat Bay became a truly bold and unique step in the history of the global oil industry. This project surpassed anything previously undertaken in extraction, requiring enormous capital investment, highly precise engineering calculations, and the mobilization of significant resources.

To implement it, part of the sea was enclosed with a dam, forming a so-called “basin,” which was then filled in to create an artificial platform for drilling and the installation of the first offshore oil facilities.

The initiative and support for this large-scale undertaking came from leading industrialists and entrepreneurs of the time, including representatives of the Rothschild dynasty.

The Rothschilds were not direct executors of the landfill works in the bay; however, they strongly supported the project. The reclaimed area became the world’s first platform on which drilling rigs and auxiliary structures were built, enabling the industrial extraction of underwater oil reserves.

This innovative step demonstrated not only a high level of engineering mastery but also strategic vision, placing Baku among the world’s leading oil industry centers.

Another significant contribution of the Rothschilds to the development of Baku’s oil industry was the introduction of new engineering solutions. The Caspian–Black Sea Company became one of the initiators of an innovative drilling method — the rotary technique, first implemented in the Surakhani area, where the Rothschilds owned their own plots. This method significantly accelerated drilling operations and increased extraction efficiency, opening new opportunities for the industrial development of oil fields.

It is also important to emphasize the role of the Rothschilds’ Baku-based company in expanding the uses of oil and petroleum products. They actively introduced these products into industrial enterprises, agriculture, and everyday life, demonstrating the versatility and strategic importance of “black gold.”

As early as 1889, at the World Exhibition in Paris, a series of high-quality paints made from benzene produced at the Baku kerosene and oil refinery of the Caspian–Black Sea Oil Industrial and Trading Company was presented. These achievements not only highlighted the technical expertise of Baku engineers but also strengthened the international prestige of the city as a center of the innovative oil industry.

The Rothschilds built and equipped a number of key industrial facilities in Baku that played an important role in the development of the city’s infrastructure and oil industry.

Among them was a gas plant in Bibi-Heybat, which supplied the city with fuel and industrial gas, as well as a power station that provided electricity to industrial enterprises and residential districts. Of particular importance were seawater desalination units, which made it possible to supply clean water to both the city and industrial facilities.

Equally important were the mechanical workshops, where numerous workers and skilled technicians were employed. In essence, these were mini-factories that ensured the uninterrupted maintenance of oilfield equipment, the repair and production of pipes, spare parts, and drilling tools. Such enterprises enabled highly efficient industrial oil extraction, reduced dependence on imported equipment, and created conditions for continuous technical improvement in the sector.

The Rothschilds’ activities in this direction not only strengthened Baku’s production capacity but also turned the city into one of the leading centers of the oil industry of its time.

An interesting historical fact is also worth noting. The Rothschilds sought to attract the best specialists from across the Russian Empire to their enterprises — engineers, chemists, and technologists.

Among them, at the end of the 19th century, an experienced engineer-technologist David Lvovich Landau moved to Balakhani together with his wife. He quickly rose through the ranks to become the chief engineer of the Caspian–Black Sea Partnership.

In 1906, the couple had a daughter, Sofia, and in 1908 a son was born, named Lev after his grandfather. The bright and curious boy was not particularly inclined to follow the family path into oil engineering and instead became fascinated by physics.

Fifty-four years later, Academician Lev Davidovich Landau of the USSR Academy of Sciences became the Nobel Prize laureate in Physics in 1962. The prize, established with the involvement of Alfred Nobel’s capital, was awarded to the son of an oil engineer who worked for neighbors of the Nobel company — a coincidence that can perhaps be described as an irony of fate.

The Rothschild Caspian–Black Sea Oil Industrial and Trading Company was also actively involved in charitable activities, demonstrating social responsibility toward the city and its residents. It financed schools for workers’ children, ensuring access to education for the most vulnerable social groups, and made significant donations to the development of educational institutions and social projects. Support was provided both by the company itself in Baku and by members of the Rothschild family in Paris, which made it possible to combine local initiatives with international resources and expertise.

These actions not only contributed to improving living and educational conditions but also strengthened the Rothschilds’ reputation as forward-looking entrepreneurs for whom economic prosperity was inseparable from social responsibility and support for the urban community.

To be continued…

By Vahid Shukurov, exclusively for Caliber.Az