Beginnings of the Oil and Gas Industry

Contributed by Mark Mau and Henry Edmundson.

On the confines toward Baku there is a fountain from which oil springs in great abundance in as much as one hundred ship-loads might be taken from it at one time. This oil is not good to use with food but it is good to burn, and is also used to anoint camels that have the mange. People come from vast distances to fetch it, for in all countries around there is no other oil.

Marco Polo was clearly impressed by the petroleum seeps when his travels in the late 13th century led him to the Absheron Peninsula in what is now Azerbaijan. Oil had always oozed out of the ground in this part of the world, but it wasn’t until the 18th century that systematic exploitation began. The method was to dig a shallow pit, wait for it to fill with oil and then bail the oil out manually. The method may have been primitive, but by the mid-19th century, annual production was recorded at 3,770 metric tons (28,000 barrels). In those days, oil was mainly used for lighting and water-proofing ships.

The First Wells

On July 14, 1848, a far more efficient method of extraction was set in motion. That day, Count Mikhail Semyonovich Vorontsov, governor-general of the Caucasus, wrote a memo to his staff that would mark the birth of the modern oil and gas industry, “I hereby authorize oil exploration in the Bibi-Eybat sector, Baku district, Caspian Sea by means of earth drills and allocate 1,000 roubles for this purpose.” The same year, with funds in hand, a certain Major Alexeev succeeded in drilling a 21-meter well and struck a small quantity of crude. The first oil well had seen the light of day.

Drilling the Bibi-Eybat well was exhausting work. The technique was to hit the earth with a sharp, heavy chisel suspended by rope from a hand-operated oscillating beam, then remove the cuttings with a kind of scoop and bucket arrangement. This rudimentary setup, called cable-tool drilling, had been practised since ancient times drilling for saltwater in China and Europe.

A decade after Alexeev’s success, oil seeps in North America began attracting attention. The first well drilled for oil was the work of a US prospector named “Colonel” Edwin Drake—the Colonel moniker was provided by an investor to impress the locals. Drake drilled his first well in Titusville, Pennsylvania, about 100 miles north of Pittsburgh, to a depth of 69 feet, by coincidence the same depth as Alexeev’s well. Like Alexeev, Colonel Edwin Drake also used cable-tool drilling, this time driven by a five horse-power steam rig.

Production began on the August 27, 1859, when Drake’s drilling foreman William A. Smith peered down the hole they had been drilling for several weeks and noticed oil standing near the top of the well. Smith grabbed a piece of tin gutter, rolled it into a tube, plugged one end, then lowered it on a rope into the well and retrieved the first oil. The next day Drake arrived, flushed with excitement at Smith’s news, and improvised an iron water pump that had extra pipe sections to reach the bottom of the well. He then rigged the pump handle to the steam-driven oscillating arm that Smith had used to drive the cable-tool drilling rig, and thus began the first US oil production from a drilled well—into a metal washtub and later into empty whiskey barrels. Drake’s production was about 25 barrels of oil per day. But like the Azeri oilmen before him, Drake had no idea if or when the flow of oil would stop. All he knew was how to drill, and the technique for doing this soon evolved.

In the two decades following the Drake well, all the major elements of the cable-tool rig took form, enabling the US to lead the world in percussion drilling. Technical innovations included using water to circulate cuttings out of the hole and building rigs that could be easily moved from one location to the next. Drake was also the first to shore up his wells with a rudimentary casing made from wooden planks. Samuel Smith, William A. Smith’s son, recalled: “The casing was driven into the ground through the use of a battering ram lifted by an old-fashioned windlass. It was my job to operate the windlass and drive the casing in.”

The technical successes of the US oil industry soon spilled back to Azerbaijan when the oil industry there was opened to foreign investors in the early 1870s. Notable arrivals were the brothers Robert and Ludvig Nobel, two Swedish engineers who arrived in the Caucasus region in the mid-1870s. Over the next 25 years, the Nobel brothers ramped up the Azerbaijan oil industry, building refineries, commissioning oil tankers and constructing pipelines. But they also needed to drill and were quick to try out new methods from the West.

In 1878, they brought six drillers from the US to try the latest cable-tool drilling at Baku but soon deemed it unsuitable for the soft formations of the Azerbaijan oil fields. Instead, they developed the so-called Azerbaijan free-fall system. In this variant of percussion drilling, the tools were allowed to fall freely to the bottom of the well and then get picked up. Nobel’s engineers also introduced a system to clean out the borehole using hollow small-diameter piping. As drilling progressed, water was periodically forced down the pipe by a steam engine with sufficient pressure to push the debris up the sides of the casing. With these and other advances, no one could match the Nobel brothers for drilling prowess.

Early Production

Meanwhile in the US, Drake was battling the challenge of keeping his wells producing. He decided to borrow two inventions from the brothers David and Joseph Ruffner who in 1808 had drilled and completed the first brine wells in the US close to Charleston, West Virginia. The first was to use hollow tubing suspended in the well to transport the fluids to the surface. Drake used copper pipe two or three inches in diameter and in sections 12 to 14 feet long. He also added a gate-valve at the surface, the first infant step toward today’s wellhead. The second Ruffner idea was to use a “seed bag,” made of leather and containing seeds of various kinds, that was placed around the tubing and positioned near the bottom of the well. The idea was that as the seeds swelled, the bag would secure the tubing inside the borehole and provide a much-needed seal between production from the bottom of the well and all sorts of contaminating sediments and water flow near the surface.

Seed bagging was critical for production, but the clumsy leather seed bags often failed to swell. In 1865, John Ross Cross from Chicago invented a system whereby a fibrous material was contained between two cast-iron hoops that could be placed anywhere in the well, then squeezed from the surface via a system of rods and wire ropes, to provide the necessary seal between the tubing and the borehole wall. But the process of lowering or raising the packer frequently compromised the fibrous packing material. A more reliable technique was needed, and it came from a young man named Solomon Robert Dresser.

Dresser grew up on a farm in Michigan and would become a classic oilfield inventor-entrepreneur. In 1862, at the age of 20, he traveled to the oil fields of West Virginia and founded the Peninsular Petroleum Company, redeveloping oil fields that had been abandoned during the American Civil War. He later moved to the booming Western Pennsylvania oil patch. Dresser spent hours hours trying to solve the packer problem, and by 1879, his early years tinkering with farm implements paid off. He took Cross’s packer idea but substituted rubber for the fibrous material. Using a simpler mechanism than Cross had used, the rubber seal was squeezed and expanded toward the borehole wall by pulling on the tubing and contracted by lowering the tubing. In this manner, the packer could be moved up and down the well without destroying the rubber seal. A patent application was duly dispatched to Washington DC. In anticipation of his patent being approved, Dresser rented space in the center of Bradford, Pennsylvania, and opened his doors for business on the very day the patent was granted, May 11, 1880. Dresser’s business grew considerably in the following years. Soon his company portfolio included other oilfield hardware such as pipeline couplings and a new type of casing head. In 1903, he handed the business over to his son-in-law and entered politics as a Republican member in the US House of Representatives. The Dresser company would continue to prosper.

In most of Pennsylvania, where Dresser was active, there was insufficient pressure to propel the oil to the surface, so oil prospectors soon devised a pumping arrangement. With the drilling rig remaining at the wellsite, the steam-driven oscillating beam, initially used to lower and raise the cable tool for drilling, was then harnessed to a long wooden rod with a plunger attached to its bottom. As the rod was lowered and raised from the surface, the plunger pushed the oil up the tubing to the surface. An innovation around 1880 was to link several wells to one power source, using various mechanical contrivances to transmit the required oscillating movement to each rig. This eliminated the cost of maintaining steam engines at each well.

In Azerbaijan, pumping was hardly needed. A gusher had been drilled in 1873, and scarcely a well could be bored afterward without finding oil in large quantities and generally rushing to the surface like a fountain. But even though the pressure was high, the Azeris had to deal with another problem. Almost without exception, Baku production was from unconsolidated sands, so the initial oil gush would carry with it vast amounts of loose sand, creating a mixture resembling to the locals something like their beloved caviar. In no time, the wells would fill with sand, production would drop and the only means of production was to bail out sand and oil together.

The fact that the early Azeri wells were bailed and not pumped meant that the early prospectors didn’t use tubing or packers, nor did they have to construct wellhead termination points at the surface. Despite these hurdles, Azerbaijan quickly surpassed the US in oil production. By 1900 the Russian Empire became the world’s leading oil producer with an output of 11 million metric tons per year (220,900 barrels per day).

This entry is based on Groundbreakers: The story of oilfield technology and the people who made it happen, by Mark Mau and Henry Edmundson. You can find the book at