Engineer and oilman who led the the early cooperation in the oil business

Today we should give the outstanding manager and talented engineer Alexander Serebrovsky his due for his major contribution to the oil industry development. His activities in establishing mutually beneficial ties between oilmen in Russia and the USA constitute a clear example of a statewide view of the industry's problems.

By the early 1920s, the oil industry of Soviet Russia was in a critical position owing to the rapid strengthening of negative development trends that appeared at the beginning of the centu­ry, and to the destruction caused by the Civil War. This affected primarily crude oil production, which was con­stantly falling. For example, in 1901 – 11,506,100 tons of oil were produced (the maximum pre-revolutionary level), in 1913 – 10,205,500 tons and in 1917 – 8,795,000 tons, but in 1920 – only 3,849,000 tons.

Many foreign analysts viewed the future of the Russian oil industry with considerable skepticism, believing that the country would be an oil importer for a long time to come.

The prominent Soviet engineer Alexander Serebrovsky, dubbed by Western journalists the "Russian Rockefeller," was of a different opinion. This extremely interesting man had experienced major events in his life. Serebrovsky was born in 1884 in the Samara Region, in the family of a rail­way worker. After finishing school in 1900, he began working at the head railway workshops of the Samara-Zlatoust railway. Two years later, he had passed the full course of a secondary school externally, and then he was accepted at the St. Petersburg technological institute. He did not complete his degree, however, owing to the revolutionary events of 1905, in which the young Serebrovsky took an active part.

At the end of 1908, he left for Belgium, where he entered the Brussels Polytechnic School and, in 1911, graduated there as a mechanical engineer. On returning to Russia, he had a variety of engineering posts in Sormovo, Moscow and Revel (now Tallinn). In May 1920, by decision of the Government of Soviet Russia, this exceptionally energetic and widely educated man was appointed head of the Azneft trust (an abbreviation for Azerbaijan Oil Trust), which at the time produced and refined about 90 % of the country’s oil. In his strategy for reviving and mod­ernizing the Russian oil business, the engineer Serebrovsky oriented him­self on making extensive use of advanced foreign and, above all American, experience. He proceeded from the assumption that the neces­sary technical and production culture already existed in Russia for adopt­ing American innovations in the oil industry. Serebrovsky intended to use the latest American technology for turning the trust he headed into one of the most competitive oil compa­nies in the world.

A decisive role in the implementation of these plans was played by several months he spent on business trip to the USA in 1924. His aim was to establish direct contacts within American oil business community, to get to know the state of the oil busi­ness in the USA and to purchase oil­field equipment.

The trip began with a visit to the head office of the standard Oil Company, in Manhattan. The Chief Executive of the company expressed an interest in cooperating with the head of Azneft. He allowed Alexander Serebrovsky free access to all the company’s facilities and plants. In the hope of developing business relations he was even ready to render all sorts of assistance in the purchase of the latest American equipment.

Alexander Serebrovsky’s trip to the USA exerted a long-term positive impact on the development of the Azneft trust and, consequently, on the entire Soviet oil industry. On the basis of analysis of American management practices, the engineer Serebrovsky proposed organizing the work of Azneft in the manner of the leading US companies. In his opinion, granting greater independence to the regions and enterprises and their transfer to cost accounting would provide an opportunity for free development and further technical and organizational improvement at the local level. The divisional structure of the trust, as proposed by A. Serebrovsky, on the basis of analysis of the American oil companies experience, was apparently best suited to Azneft since it took into account its large size, geographical dispersion of its offices and enterprises, orientation on a broad range of petroleum products.

Thus, A. Serebrovsky has made greater contribution to the development of oil industry of the country.