THE PAST ANEW

Azerbaijan 2013 | ENERGY | GUEST SPEAKER

Gustaf Nobel, Chairman of the Nobel Sustainability Trust, on the history of the Nobel family in Azerbaijan and the encouragement of clean energy.

Gustaf Nobel
BIOGRAPHY
Born in 1950, Gustaf Nobel studied at the University of Lund and graduated in Marketing and Economics. He began his career at companies such as Electrolux, ABB, and Trelleborg. He also spent time with Delifrance AB and Nestlé. He now runs Conversus SARL, which specialized in management and personal development as well as in assisting foreign companies entering the French market. He is highly involved in environmental projects and renewable energy solutions, and is the Co-founder and Chairman of the Nobel Sustainability Trust.

In the middle of the 1850s Ludvig Nobel, elder brother to the world famous inventor and creator of the Nobel Prize, Alfred Nobel, established a mechanical factory in St Petersburg producing grenades with a new technology. He later followed this with cannons, rifles, and gun carriages. The company was soon to become one of the largest suppliers to the Russian army and the beginning of a tremendous success story, which would be largely unknown to most people outside Russia and Azerbaijan. Working together with Ludvig was his older brother Robert. He was sent to the Caucasus region on a mission to find walnut wood for rifle stocks to fill an order of 200,000 rifles for the Russian army. Arriving in Baku, he discovered that oil was literally bubbling out of the ground, and he realized that there was a great opportunity in the oil business. He returned to St Petersburg and managed to convince Ludvig to invest in Baku. In 1875, the first Nobel refinery was inaugurated under the name Bra Nobel. Alfred was also called upon to invest in the company, which he did. They could never have realized at the time that by 1917 Bra Nobel would be the second largest oil company in the world.

The Russian revolution abruptly ended the almost 80-year-long success story of the Nobel family in Azerbaijan and Russia. Ludvig, being a scientist, inventor, and entrepreneur as well as a businessman, quickly saw the potential in this new business as well as its problems. One major problem that he could identify was logistics. At that time, oil was transported in leather sacks or wooden barrels by camels and donkeys—not a very efficient means of transportation. He, therefore, designed and built the first oil tanker, the Zoroaster, the first in a fleet of 40 oil tankers. He laid the first pipeline in Azerbaijan to Russia, built special railway wagons for oil, introduced steam engines in the oil fields, built the first depots for oil and kerosene in Russia, introduced the first electrical plant in the Caucasus, and pioneered new modern drilling technics. Bra Nobel became one of the first fully vertically integrated companies in the world.

Another important success factor was his sense of corporate responsibility. As a visionary leader, Ludvig improved the conditions of his workers by shortening working hours and building schools, housing, healthcare, and recreational facilities. He opened a cooperative bank and introduced a pension system. Overall, 40% of the company's profit was returned back to its employees. Sustainability and social commitment became the trademarks of Nobel industries. After his death in 1888, his oldest son, Emanuel, continued in the same spirit and developed the company even further up to the very end of its existence. It must also be mentioned that without the efforts of Emmanuel there would probably not have been any Nobel Prize. He insisted that Alfred's last will should be respected, and bought all of his shares in Bra Nobel.

The Russian revolution in 1917 changed the scene dramatically. All of the Nobel industries and properties were confiscated by the new regime. The family was forced to flee the country under dramatic circumstances and leave everything behind. With the help of loyal employees they managed to return to Sweden, safe but empty handed. Today in Azerbaijan, almost 100 years later, the Nobel name is highly respected and the ordinance set by Ludvig for Bra Nobel lives on in the oil business.

The Nobel heritage has been restored today thanks to the Baku Nobel Heritage Fund (BNHF), founded by Dr Togrul Bagirov. In 2008, the old family residence in Villa Petrolea, Baku, was inaugurated after a total restoration, funded by BNHF. Many members of the Nobel family participated in the inauguration. The villa is today a Nobel museum as well as a place for receptions, weddings, and other events, as well as hosting the Baku Nobel Oil Club (BNOC) with members like SOCAR, BP, and Statoil. Members of the family frequently return to a rapidly changing Baku and Villa Petrolea, both for social and business activities. One such activity is the digitalization of the old archives of Bra Nobel by the National Board of Archives, the Centre for Business History in Stockholm (CBHS), and BNHF in cooperation with the Nobel Family Society. The Nobel Sustainability Trust is a family initiative aiming to crystalize and extend global awareness and focus on environmental considerations and solutions to ensure access to energy for all members of society whilst ensuring the protection of the earth. The work of the trust is in the spirit of Ludvig, and its main pillars are the Sustainability Award, the Sustainable Energy Conference, and the Nobel Sustainability Fund. Over the last three years, the Trust has participated in the Caspian Oil and Gas Conference as a keynote speaker stressing the need for renewable and sustainable energy to replace fossil fuels. In a cradle-to-cradle perspective, the Trust is also working on the establishment of a science park for clean technology in Baku. This project is well in line with the mega project, initiated by President Ilham Aliyev, transforming Baku from the “Black City" to the “White City."