With Oil Through Generations - PKN Orlen

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With Oil Through Generations - PKN Orlen

with oil

through

generations

1


ODDZIA STOWARZYSZENIA INYNIERÓW I TECHNIKÓW PRZEMYSU CHEMICZNEGO W POCKU

with oil

through

generations

text

ALEKSANDER PUCHOWICZ

archive postcards

COLLECTION OF JERZY ZIELISKI

POCK 2006

3


causative institution

BRANCH OFFICE OF THE SOCIETY OF CHEMICAL INDUSTRY ENGINEERS IN POCK

09-411 Pock, ul. Chemików 7

MAIN SPONSOR OF THE ALBUM

THE SPONSOR OF THE ENGLISH VERSION EDITION

ISBN 83-915827-4-4

translation from Polish

WOJCIECH JÓWIAK

proofreading

ANDRZEJ DOROBEK, JERRY TEMANSON, ALEKSANDER PUCHOWICZ

graphic design

typography and editing

JACEK CZURYO i ZBIGNIEW CHLEWISKI (jzc)

illustrative materials

archive postcards from JERZY ZIELISKI’S collection (pp. 8-120)

archive photographs from PIOTR GSIOR’S collection (p. 6)

JERZY FALL (p. 134)

M. SOKOOWSKI (p. 130)

HALINA PUCIENNIK (p. 138, bottom of pp. 142, 144, 146)

collections from SITPChem Pock archives

printed and bound in

Olsztyskie Zakady Graficzne SA

editor

SAMIZDAT ZOFII O

mobile: [+48] 695 602 157; e-mail: samizdat@go2.pl

First English edition

Number of printed copies: 1500


The present album was published to commemorate

the 150 th anniversary of the oil industry establishment

on the territory of Poland.

This book was written thanks to the interest shown

by a group of long standing employees of the Production Complex

of the Polish Oil Company ORLEN SA,

and thanks to the initiative and engagement

of Mr Eugeniusz Korsak–President of the Association

of Pock Oil Industry Employees

and Vice-president of the Pock Branch

of the Polish Society of Chemical Industry Engineers,

and Mr Aleksander Puchowicz, ORLEN’s retired engineer

and the author of the text.

The album “With Oil Through Generations” is a collection of unique

photographs as well as a peculiar compendium of historical knowledge

about the Polish oil industry presented through the prism of its worldwide

development.

This work is also to be a sign of our memory of all heroes of the pioneer

times of oil production and processing, among others of the founder of the

Polish oil industry–Ignacy ukasiewicz.

We also included materials and documentation belonging

to Mrs Alina Klocek, Mr Jerzy Zieliski’s private archive postcards

as well as contemporary photographs of PKN ORLEN SA

belonging to Mrs Halina Puciennik.

The remaining pictures were included by courtesy

of the Polish Oil Company ORLEN SA.

We do hope that every reader, regardless of his/her age

or professional interests, will find in this book the spirit of revolutionary

changes accompanying the use of crude oil for the benefit of man in which

the Poles have had their considerable share.

PUBLISHER

5


Ignacy ukasiewicz in his last

years of life

(Piotr Gsior’s collection).

Honorata ukasiewicz, born

Stacherska, Ignacy’s wife

(Piotr Gsior’s collection).

PREFACE

We hereby hand over to our dear Readers an album to stop in time some moments

from the past oil industry. We think we owe this to all those who, most frequently

nameless, founded, developed and devoted their strength to that industry and

sometimes made an offering of their lives.

The year 2003–the year of ukasiewicz–was a good opportunity to remind the

unparalleled accomplishments of this man, of his contemporaries and experts who

grew up in the climate of innovation and hard work. Poland, being deprived of its

independence and statehood, was a cradle of this industry and mattered much in the

world of oil. Unfortunately, that world gradually began to disappear from us. However,

some efforts undertaken in recent years to reduce our distance toward the avantgarde

of the oil industry seem to augur well for the future.

Out of the splendid history of the Polish oil industry we managed to protect and

present only several photographs within this text. We tried to replenish them with

texts based on studies drawn up by people coming from the Polish Society of Chemical

Industrial Engineers as well as borrowed from the museum–a heritage park in Bóbrka

and particularly from Historia polskiego przemysu naftowego [History of the Polish Oil

Industry] edited by Professor Ryszard Wolwowicz and published in 1994 in Brzozów

and in 1995 in Cracow. We took pains to present our history against the background

of our geopolitical history and to sketch it in the context of that industry position at

a given time. We had a double, well-founded right in the post-war, modern history to

write mainly about the Pock Refinery–the largest one in Poland and one of the biggest

in Central and Eastern Europe. We entangled its history in the world trend. Thus, we

wanted to avoid the suspicion of glorifying the Polish achievements or overestimating

their meaning. Such an approach definitely made the task more difficult and therefore

sometimes the narration may seem uneven and in many cases the author had to use

professional jargon.

Now Poland is coming back to the free world and faces the fate which we

experience together with other European nations as one great family. However, while

writing and illustrating the history of the Polish oil industry we cited much data and

some information from the United States of Northern America because this is the

country in which the oil business places itself as an undeniable leader and it is still

supposed to take the lead of the great world oil and petrochemical industry. Whereas

here, in Europe and in Poland, we do our best to keep pace with that powerful country.

Every day writes a new history. It has already been 150 years since Ignacy

ukasiewicz began the oil industry. This liquid means the future wealth of the country, it

means the prosperity and success for its citizens, it is the new source of earnings for the poor people

and a new branch of the industry which is going to bring abundant fruit. In this liquid

ukasiewicz saw the wealth of his motherland and the people’s welfare. These prophetic

words might not fully come true. History is a teacher, thus let its lessons help all of us

to accomplish this task–a spiritual testament of this Great Pole. Looking forward to a

friendly reception of this album, we do not run away from criticism. We wish all the

Readers much satisfaction during its reading.

I. TIMES OF OIL INDUSTRY PIONEERS

Crude oil has been well-known since the oldest times

The saga of petroleum which we celebrate here goes back to the most ancient

epochs of 3000 B.C. to the Sumerians, as well as some other nations like Mesopotami,

the Egyptians, the population of many Asian areas, of Europe and America all of

whom have left evidence testifying to their use of oil which can be seen in the pyramids,

in the famous processional road in Babylon, in notes about holy fires in some beliefs

from the Caucasus. The walls of Jerycho and Babylon and, probably Noah’s Ark and

Moses’ basket, contained the binding material in a form of bitumen. In the first

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Script placed under ukasiewicz’s

statue together with

a corner-stone in Krosno on

September 30, 1928.

Krosno–unveiling of

ukasiewicz’s statue

on October 23, 1932.

century before Christ, the Greek historian Diodor described with enthusiasm the

bitumen industry of the ancient Babylon. And the Roman naturalist Plinius in the

first century A.D. mentioned the healing influence of mineral pitch in the treatment

of wounds, cataracts, toothaches, rheumatism, fever and other ailments. In Homer’s

Iliad there is a note about fire used by the Trojans. The Persian king Cyrus, before the

occupation of Babylon, warned its defenders against the use of quickly spreading

flames; probably the burning gases near Kirkuk came from that burning pit into

which the Babylonian king Nabuchodonozor ordered the Israelis to be thrown.

According to Plutarch the local population greeted Alexander the Great with

illuminations. Many prominent literary works mention bitumen, including those by

Aristotle, Herodot and Strabon before Christ or Dioskurides and Tacyt in the first

centuries after Christ. Supposedly, oil was already being distilled in Alexandria in the

early Christian epoch. The horrendous Greek fire–oleum incendiarum–had been used

and the recipe for its production had been diligently guarded in Byzantium since the

seventh century. The Middle Ages brought news about petroluem from the Arab

cultural circle. We know such names as Masudi, Tabari or Karafi who wrote about it.

In 1272 the famous traveller Marco Polo saw burning oil lamps in Baku. Prominent

modern philosophers like F. Bacon, B. Ramazzini, A. Libavius, Macquer, de Saussure,

Claire–Deville, J. Dumas and others wrote about oil. As early as in the beginning of

the 18 th century, Burma had a blooming oil industry. At that time an amazed British

ambassador reported about 500 oil wells providing product for the needs of about

7 million consumers.

Unfortunately, there is no equally ancient Polish written evidence about the

occurence and use of oil as one can find in Babylonian, Egyptian, Jewish, Persian,

Greek, Roman, Arabic or mediaeval European sources. There is, however, information

from the 13 th century. The more recent data come from Jan Dugosz, and still more

recent information, from ukasiewicz’s times, can be found in works by Stefan

Falimierz, Hieronim Spiczyski, Marcin Siennik, Marcin of Urzdów (16 th century),

Erazm Syxt, Konrad Archiatr, Wojciech Tylkowski, Stanisaw adowski, Jan Jonston

(17 th century), Gabriel Rzczyski, Krzysztof Kluk, Baltazar Hacquet, in almanacs

by Jakub Niegowiecki and Stanisaw Duczewski (18 th century). The writings of

these authors contain a lot of information about exploration, production and even

about processing and the use of oil in many localities of Podkarpacie–the Polish region

near the Carphatian Mountains. Stanisaw Staszic in his work entitled O ziemiorodztwie

Karpatów i innych gór i równin Polski [Earth Treasures of the Carpathian Mountains and

other Polish Mountains and Plains] published in 1815 writes: ...on the very surface there is

yellowish grey oil. The one collated from the top is used for lamps and candles. It lights easily,

gives thick lampblack and burns out without leaving any remainders. It is the species called

“naphta bitumen fluidissimum, levissimum, naphta...” In 1813 Joseph Hecker began crude

oil distillation tests and in 1817 delivered distillate to illuminate the streets of

Drohobycz, the barracks in Sambor and the salt mines in Truskawiec. In 1837, in

Paris, the Frenchman Joseph Pelletier and the Pole Filip Walter performed the

fractioned distillation of oil. The books by Franciszek Siarczyski of 1828 and

J. B. Pusch’es of 1836 write about rock oil from the Galicia land. Numerous Polish

scientists had already expressed their interest in oil by the beginning of the 19 th century.

Why then count the “oil era” since ukasiewicz? Crude oil in Galicia, often selfactively

streaming out to streams and rivers, was at that time used for oiling carts

axis. When it was burnt its greasy remains were called maziuga. Soon ukasiewicz’s

activities contributed to the situation that the outflow quantities were not sufficient

and explorers started to reach to deeper geological layers. Poland, at that time being

partitioned, did not have, unfortunately, such possibilities and capital as the mighty

powers of the contemporary world.

But let us eventually introduce that great personality. Let Jerzy Zieliski, a

connoisseur and expert, speak with his colourful text.

9


Krosno–a keepsake from the

ceremony of unveiling of

ukasiewicz’s statue

on October 23, 1932.

“Father” Ignacy ukasiewicz (1822-1882)

On July 31, 1853 kerosene lamps were to flare up for the first time in the Lvov

hospital. The makers of the new type of lighting were the local drugstore employees: a

pharmacist Ignacy ukasiewicz and a tinsmith Adam Bratkowski. Their invention

was to make the work of the hospital staff independent on the time of day–the hitherto

existing operations were carried out exclusively in daylight. There came the moment

of tests.

ukasiewicz and Bratkowski, not too much domesticated with hospital, trod

after a male nurse Bazyli tiptoeing and trying to make as little noise as possible.

Bratkowski, who found himself in hospital for the first time in his life, looked around

with curiosity. In the darkness of the evening he saw two rows of beds on which

patients were lying or sitting. The beds were situated with their heads towards walls,

out of which only one had several windows. The setting sun cast red glimmers on the

white bedding and the sick people’s pale faces.

–Mr Bazyli–ukasiewicz said with a whisper–have your old cressets lit. When doctors

come we will blow them out and we will light the two olive cressets which are hanging on the hall

walls.

Both these flickers were hardly visible by the evening twilight.

–What kind of light do you use when you operate here?–the pharmacist asked the nurse.

–Operations are made only during the day.

–And if you have to operate at night?

–It hardly happens. We usually wait till the morning.

–And if it is really necessary? Sometimes human life depends on an hour, a moment...

–Ah, in such a case the doctor cuts a patient by candlelight but it is very uncomfortable.

ukasiewicz did not ask any more questions because at that moment one could

hear steps in the corridor and suddenly several persons stood on the threshold...

–This is Mr ukasiewicz–the hospital director introduced the inventor.

–Nice to meet you–the president reached out to ukasiewicz–I know from the director that

you wish to offer your invention to the hospital. It is very nice, very nice... then show us please

these wonders.

–No wonders, Sir–ukasiewicz bowed modestly–it is a simple result of work and logical

reasoning. Rock oil has such a property that by means of distillation it is possible to get light and

clean liquid out of it. Let’s call it kerosene. That kerosene, when closed in a tank, from which a

linen wick sticks out, burns wonderfully. As you see, gentlemen, the wick is located in a metal

burner with which you can fix the flame. Here you are, I am lighting–he reached out for a

burning dip with one hand, and with a second one he removed a transparent mica cylinder from

the lamp. He adjoined the burning dip to the protruding wick and placed the cylinder back on

the device.–Light the other one–he told Bratkowski, handing him the dip.–And let Mr Bazyli

put out the cressets. Let’s wait a moment now until the lamps light up–he said fixing the flame

height.

Doctors and councillors looked at the scene curiously and with admiration. After

a while the lamplight became brighter and lit up the whole great hall. ukasiewicz

looked around and saw several pairs of sick people’s eyes gazing intently at him and

the lamplight...

Thirty minutes later the first night operation took place by the bright lamplight

of ukasiewicz. This was on July 31, 1853. The operated patient was rescued.

That scene from the Lvov hospital was described in the book Nafta... nafta...

nafta [Kerosene... kerosene... kerosene] by Jerzy Kossowski. Who was that great inventor

of an oil-lamp which saved Wadysaw Holecki’s life, the first patient operated on by

such light?

Ignacy ada ukasiewicz was born in 1822 in the village of Zaduszniki which is

located by the Vistula river, about twenty kilometres from Mielec. Little Igna was

baptized in the church in Padwa Narodowa. His parents–father Józef (court clerk)

11


Kuryer Lteracko Naukowy–

a supplement to Ilustrowany

Kuryer Codzienny No. 295

of October 24, 1932, about

unveiling of ukasiewicz’s statue

in Krosno.

and mother Apolonia born wietlik (they got married in Gawuszowice)–lived on a

lease in Zaduszniki village. However the lease did not bring them enough earnings to

live on. Ignacy was sent out to take his first school lessons in Rzeszów. Having

completed the fourth class of high school at the Piarists’ school in 1836 and after his

father’s premature death (the same year), the family began wondering over Ignacy’s

further education or whether to train him for an occupation. It turned out that the

ukasiewicz family could not afford paying for Ignacy’s further education and he

eventually was sent to a drugstore in acut (at Antoni Soboda’s) on apprenticeship

which he completed in Rzeszów. Young ukasiewicz applied himself very much to

learning the vocation. In 1841 he took up his first job in Hubla’s drugstore in Rzeszów.

At that time, Ignacy engaged himself in national activity and actively took part in

activities aimed at preparation of the peasants’ uprising. In 1846 he was arrested by

the police in Rzeszów. However, he did not give in and despite drastic measures used

by the police he refused to testify. He was transported to Lvov and put into the local

prison where he behaved similarly. His comrades, Teofil Winiowski–a leader of the

uprising in eastern Galicia–and Józef Kapuciski from Pilzno, were hanged in 1847.

The fate turned out more gracious for ukasiewicz–during the so called Spring of

Nations of 1848 he managed to leave the Lvov prison and began to work at Peter

Mikolascha’s municipal drugstore. Being a novice pharmacist he decided to study

more in the chosen occupation. In 1850 he set out for Cracow where he took up

studies at the Faculty of Pharmacy at the Jagellonian University. It was there that for

the first time he encountered the oil issues. Already at that time, lab experiments on

crude oil had been made in order to produce clean kerosene. In order to investigate

the problem further, ukasiewicz moved to Vienna and took up pharmaceutical studies

at the University. In 1852 he graduated from the University and was granted the

degree of Master of Pharmacy. Having completed those thorough studies, Ignacy

ukasiewicz came back to Lvov and took the position of a dispenser in Peter Mikolasch’s

drugstore Under Golden Star. Together with another pharmacist, Jan Zeh, he occupied

himself with the distillation of petroleum which the Galician terrains from Krosno to

Drohobycz were abundant in. Ludwik Tomanek wrote about those facts in his book

commemorating the 75 th anniversary of the lighting of the first oil-lamp:

When ukasiewicz was occupied with his chemist’s ordinary work, a Jew named Schreiner,

an owner of a tavern from neighbouring Borysaw, turned up in Mikolasch’s drugstore. Schreiner

noticed that local peasants boiled petroleum in large pots to thicken it and to make it more useful

to lubricate carts. During boiling some yellowish liquid gathered on the pot lid and the barkeeper

came upon an idea whether it would be possible to receive... vodka from it. Thus he brought

samples of this liquid along with crude oil with a request to help him and give advice. Then

ukasiewicz experienced something like a revelation. He decided to deal with distillation.

Naturally, not in order to get spirits out of it but to explore it for other practical objectives.

As a result of the research and experiments performed in the pharmaceutical

laboratory, ukasiewicz and Zeh produced a product which the Galician pharmacists

had already been importing from Italy and using for the production of medicines and

cosmetics. The drugstore owner got interested in the received liquid from a

pharmaceutical point of view. But the produced distillate did not enjoy much interest

among other pharmacists and Mikolasch withdrew from further co-operation in its

production. Hence ukasiewicz and Zeh engaged themselves in lab work out of the

drugstore. This time they directed their interests towards the utilization of oil for

lighting. After initial unsuccessful tests in this direction the two pharmacists entered

into co-operation with a Lvov tinsmith, Adam Bratkowski, and working together

they developed a new model of a lamp. The effect of that co-operation was the

inflammation of the first oil-lamps in hospital in Lvov-yczakow in 1853. Soon

afterwards the partnership of ukasiewicz–Zeh broke up. After that, at the beginning

of 1854, Ignacy ukasiewicz moved to Gorlice. There, close to sources of petroleum,

he leased a drugstore which was run by Tomanowicz.

13


At the same time he distilled crude oil produced in the closest neighbourhood.

However, still his main activity was running the drugstore: in 1856 he leased another

drugstore, in Jaso, where he moved in 1858 and in 1859 he established a pharmacy

near Brzostek. During his short stays in Gorlice and Jaso, ukasiewicz was very warmly

welcomed by the local societies. When he decided to leave Gorlice, the local Jewish

community expressed their readiness to pay for the lease of his drugstore–just to make

ukasiewicz stay in the town. On June 12, 1861, Jaso granted “The Honourable

Gentleman Ignacy ukasiewicz” the Honourable Citizen’s Diploma for the fact that

he was always with faultless zeal and civil devotion and was always ready to be up to the

confidence expressed towards him. Jerzy Kossowski, in his book Kerosene... keresene... kerosene,

presented a scene of Karol Klobassa and Tytus Trzecieski meeting Ignacy ukasiewicz–

an essential event for the history of the Polish oil industry:

Klobassa was walking ahead. On the way he prepared a beautiful oration and from the

threshold just wanted to start it but he disconcerted himself when in the dark shop [in ukasiewicz’

drugstore in Gorlice–J. Z.] he perceived nobody. He started to grunt and to purr, surprised that

the bell ringing at the door did not call out anybody from other rooms but he yet lost countenance

when he spotted a small, grey-haired woman standing on the threshold with a black cap on.

–Can I help you?–she asked with a silent and wafer-thin voice.

–We would like, honourable lady, to see master ukasiewicz–said Klobassa bowing gallantly.

–My son is busy now–the old lady replied–I will serve you myself if you want some readymade

medicines. Unless you have some difficult recipe so please leave it and when you come in an

hour it will be ready.

–We came here not for any medicines, honourable madam–Karol bowed again. We would

like to talk with mister ukasiewicz about important issues...

–What kind of issues if I may know? My son has no secrets in front of me.

–But these are gentlemen’s matters, dear madam...–mister Klobassa hesitated.

–Surely again that politics!–sighed the old woman.–Please save him, at least with

regard to my person! The boy was locked up in prison in Rzeszów and at the Carmelites in Lvov

the whole two years... and then in Cracow...

–Please calm down, madam–Trzecieski joined the discussion–We came here rather

with a trade matter...

At that moment behind the old woman’s back did stand a tall man with a slim

face and a shaggy long beard. He had a tall forehead and his long hair was backcombed.

–What can I do for you, gentlemen?–he asked in a deep, gentle voice.

–My name is Klobassa–Karol bowed.

–And my name is Trzecieski–Tytus echoed.

–ukasiewicz–the newcomer introduced himself...

The three men entered a low but spacious chamber in which on a wide table by

the wall there stood rows of bottles and tubes, filled with liquids of all possible colours.

Some strange machine was placed in the corner, on a deep chimney place, under wide

eaves, consisting of a whole series of glass and metal tubes and pots.

Meeting Tytus Trzecieski as well as Karol Klobassa–the owner of the oil-bearing

fields in Bóbrka near Krosno changed Ignacy ukasiewicz’s direction of interests.

They together decided to make investments in the exploration, production and

processing of crude oil. Their joint endeavour was the establishment of an oil well

which was founded in 1854 in Bóbrka forests. That historical event is commemorated

with a big stone and a board with an inscription reading: To preserve the memory of the

establishment of the rock oil well in Bóbrka in 1854. Ignacy ukasiewicz, November 4, 1872.

The first oil distillery on the Polish land came into being in 1856 in Ulaszowice near

Jaso, thanks to the initiative of ukasiewicz and Trzecieski. However soon after it

started up it burnt down and the local population did not allow it to be rebuilt. Due

to oil I lost my property and thanks to it I am going to recapture it–ukasiewicz is supposed

to have said so. The next distillery was founded in Trzecieski’s estate in Polanka

15


Reconstruction of an oil lamp

on the basis of ukasiewicz’s

design.

(nowadays the district of Krosno)–it processed oil coming from the well in Bóbrka.

Due to problems with oil transportation (it was carried in barrels on carts or sleighs)

from Bóbrka to Polanka in 1865, ukasiewicz built and started up a bigger and more

modern refinery located in Chorkówka near an oil well in Bóbrka. He moved and

settled permanently there, with his wife, Honorata, a woman full of kindness (born

Stacherska, a lawyer’s daughter from the Congress Kingdom of Poland) in the

purchased manor-house. In 1870 the company of ukasiewicz-Trzecieski-Klobassa

was wound up. Klobassa kept the oil well in Bóbrka, Trzecieski became the owner of

neighbouring lands and ukasiewicz became the owner of the distillery in Chorkówka.

Inseparable was that partnership of the three folks, who in unlimited mutual trust did not

disappoint one another till the end, who without any formal contracts, depending only on oral

agreement, turned over millions without even a shadow of misunderstanding–this text was

written in a magazine Górnik [Miner] established by ukasiewicz in Gorlice which

dealt with crude oil matters. ukasiewicz’s decision to settle down in Chorkówka

began a new cycle of the newcomer’s life who came from the distant village of

Zaduszniki located near Mielec.

He inherited patriotism as well as sensibility to human misery and social injustice

from his family home. Leading an affluent life in his region rich in petroleum he

became both a philanthropist and a great social activist. Not taking personal part in

the January Uprising he supported its participants and he would give them shelter.

He took care of raising the political, social and cultural consciousness of the local

population. He aimed at improving the level of education and professional knowledge

among neighbouring folk. He became the founder of the people’s schools in Chorkówka

and Bóbrka as well as in nearby Zrcin and eglce. In Chorkówka, he established a

lace-making school which was run by his wife Honorata whereas in Ropianka he set

up a drilling school. He used to found and support communal loan-societies and

confraternity cash desks oriented on granting pensions and subsistence allowances to

workers. He would support neighbouring parish-priests and orders through free

deliveries of kerosene, and along with Karol Klobassa he financed the construction of

a magnificent church in Zrcin. In 1873 he received the title of the Papal Chamberlain

as well as Holy Gregory’s Medal from Pope Pius IX. It was decided to hand over this

distinction to ukasiewicz in a special way.

Without disclosing the aim of arrival, the following people arrived in Chorkówka:

prelates of Przemysl cathedral, canons, deans, parish-priests–each festally garmented or with

insignia on his breast. ukasiewicz did not know yet what was going on. Of course, he received

the guests and entertained them hiding his surprise. In the court there was a home chapel–it was

opened and a holy mass was celebrated there. After the mass “Father Ignacy” was surrounded by

the whole ministers’ team and one of prelates declaring that he was the Holy Father’s delegate,

having delivered a suitable address, read out the diploma.

Ludwik Tomanek, in a similar and colourful way, described a solemn presentation

to ukasiewicz (on his name’s day in 1878) of a medal commemorating the 25 th

anniversary of his activity. Appropriate information was published by the whole Polish

press, and a Vienna daily Neue Freie Presse, stressing that the Emperor had already

honoured ukasiewicz with a 3 rd class iron crown medal, wrote:

Austrian oil industrialists gathered on July 31 at the ceremony in the number of 80

persons–clergy, officials, manufacturers, oil miners, engineers and ordinary workers–in order to

express their gratitude to this persistently active man who through his fearless, untiring activity

helped this Galician industry flourish and reach the level of competitiveness. After the Holy

Mass ukasiewicz was handed over a gold medal with his faithful image as well as an album

with photographs of almost all the manufacturers and clients. An elaborately made medal had

the following inscription on its reverse side: “To the creator of the oil industry on his 25 th jubilee

in 1878–manufacturers.” These ovations concern the man who along with his tough occupation

and tiring work distinguished himself in the whole country with his humaneness, noble altruistic

approach, understanding of charity objectives and thus gained his fellowmen’s respect.

17


Gorlice–a market square with

a town hall housing

ukasiewicz’s first drug store;

a postcard from the beginning of

20 th century, printed by

Ch. Kleingut in Gorlice

(phototypography).

Chorkówka near

Krosno–a correspondence card of

the Oil Refinery

Fibich & Stawiarski of 1900.

One should also know that in 1876, Ignacy ukasiewicz was elected Member of

the National Parliament (Seym) in Lvov. There he mainly dealt with matters connected

with the development of the oil industry–legal regulations, economic and social issues.

In 1880, due to ukasiewicz’s initiative, the Oil Association was founded which under

his presidency used to protect the interests of oil enterprises. He also got involved in

matters connected with the Krosno district. ukasiewicz was chosen a member of the

county department dealing with the building of roads and bridges and soon after his

appointment he made the roads in Krosno district the best in the whole region of

Galicia. People used to say then: In Krosno, district roads are paved with ukasiewicz’s

guldens. ukasiewicz was also a tip-top farmer on his own farm: he used to raise purebred

cattle, he kept a pedigree sheep-fold, he built fish-ponds, and he dealt with

orcharding and bee-keeping. He particularly took a liking for orcharding–he himself

planted fruit trees along roads and encouraged others to do the same by paying a

gulden for every planted tree. “Father Ignacy,” as he was called, was a tip-top example

to follow for his neighbouring peasants. The ukasiewicz couple did not have their

own children. They adopted five-year-old Valentine whom they loved as their own

child. They kept an open house. It was an asylum for numerous others after the 1863

uprising, political wanderers as well as the youth who went there to spend their

breaks or holidays and for whom Father Ignacy founded scholarships at national and

foreign universities. But a good and beautiful life must end one day. Ignacy’s last years

were so beautiful that his death was blessed–an eye-witness of ukasiewicz’s last hours

wrote in Stranica Polska [The Polish Watch Tower] Gazeta Narodowa [National Gazette]

reported his last moments life as follows: On December 31 the late Ignacy worked till 11

p.m. complaining about his general incapacity, then he went to bed, and the New Year morning

met him already with little consciousness. Pneumonia proceeded quickly and all the doctors’

attempts were ineffective. About 11 a.m. he recognized nobody–fever developed more and more,

he spoke in malignant fever the whole week, day and night throughout. Only sometimes it seemed

that he came to himself for a short moment. His sight became more gentle and he recognized people

standing by his bed and with a handshake blessed them for ever. Ignacy ukasiewicz died on

January 7, 1882 in his 60 th year of life, full of creative strength. The funeral ceremonies

were held in the presence of a crowd of almost four thousand people–officials, Krosno

townsmen, oil workers, children, friends as well as a great number of clergy of various

denominations. The ceremony took place in Zrcin, in the parish church of which

ukasiewicz was a co-founder. He was buried in Zrcin cemetery. Honorata–a widow

after Ignacy ukasiewicz died in 1898.

The memory of Father ukasiewicz survives to our times in the Podkarpacie

region. Krosno, which bestowed Ignacy ukasiewicz with the Citizen’s Title of Honour,

also built him a beautiful statue by the well-known Cracovian sculptor, Jan Raszka.

In the letter commemorating the laying of the corner-stone under the statue and

duplicated in the form of a postcard, we can read: On September 30, 1928, in the tenth

year of Poland’s Independence, when Ignacy Mocicki, Ph.D. was the President of the Republic

of Poland, Kazimierz Bartel, Ph.D. was the Prime Minister, the First Marshal of Poland,

Józef Pisudski was the Minister of Military Affairs and the Great spiritual leader of the

Nation, General Sawoj-Skadkowski was the Minister of Internal Affairs, Engineer Eugeniusz

Kwiatkowski was the Minister of Industry and Trade, Count Wojciech Gouchowski was the

Lvov Province Governor, Emil Rappe was the head of Krosno district, Jdrzej Krukierek, M.P.

was the Mayor of Krosno, whereas Rev. Micha Nowakowski was responsible for his parish

souls–the corner-stone was laid under the statue of Ignacy ada–ukasiewicz, the Creator of

the Polish oil industry, noble alms-giver, faultless citizen, inventor of crude oil distillation and

the constructor of an oil-lamp,who connected the nobility of feelings with the power of knowledge.

This statue will be built from offerings of these people who following the Great Pioneer drilled

the extremely rich interiors of the Polish soil as well as owing to gifts of grateful citizens as a

mark of acknowledgment of the noble initiative and civil virtues of Ignacy ukasiewicz for the

good of the Country and the fame of the Polish Name. The statue was located on one of the

19


town central squares. After half a century it was restored to the memory of generations–this

is how Ilustrowany Kuryer Codzienny [Illustrated Daily Courier] entitled the article

describing the ceremony of unveiling Ignacy ukasiewicz’s statue in Krosno on October

23, 1932. Thirty years later the poet Jan Zych wrote:

In a blown away apron,

Fashioned in bronze,

Cheerful and thoughtful

Both in December and May.

His beard and moustache

Covered with patina

And sparrows chirp

On the oil-lamp

Which he holds in his hand,

When I arrive in Krosno

To ukasiewicz I bow.

The most vivid memory about ukasiewicz is still maintained at Podkarpacie.

The Gorlice town-dwellers show visitors with pride the site commemorating the first

street oil-lamp lit by ukasiewicz, and the Regional Museum in Gorlice collected

many souvenirs that are connected with this pioneer-of-oil-industry’s stay in this

town (among others, the first boiler for oil distillation). In Bóbrka (near Krosno)

there are still some oil wells in operation which were drilled in ukasiewicz time. In

1972, which was announced as the Year of Ignacy ukasiewicz, the Ignacy ukasiewicz

Museum of Oil Industry was opened there. It is situated on the site of the historical

oil well. The Podkarpacie Museum in Krosno accumulated a splendid collection of

oil-lamps. The replica of ukasiewicz statue from Krosno decorates the hall of Academy

of Mining and Metallurgy in Cracow. A bust of ukasiewicz was unveiled in Bóbrka

(in the museum), in Gliwice (near a shrine with the first oil street lamp), in Cracow (in

front of the seat of the Oil and Gas Exploration Company), in Pock in ukasiewicz

street or in Rzeszów at the Technical University named after ukasiewicz. The town

of Jaso commemorated ukasiewicz with a plaque with his face which was placed in

the building housing his drugstore as well as in Ulaszowice where the oil distillery

had operated till it burnt down. Pharmacists’ and oil-men’s associations as well as

schools and hospitals bear Ignacy ukasiewicz’s name. As a tribute, 2003 was

announced the year of Ignacy ukasiewicz.

Jerzy Zieliski

Schodnica (Poland’s former

border land)–Pasieczki oil field;

a postcard of 1903 printed by

Julian Polak in Schodnica, on the

basis of a photography by Stefan

Borówka (phototypography).

Schodnica (Poland’s former

border land)–Zrb oil field;

a postcard of 1903 printed by

Julian Polak in Schodnica on the

basis of a photography

by Stefan Borówka

(phototypography).

The personage of Jan Józef Ignacy ukasiewicz is described by many authors

and this is why we should let them speak. Professor Stanisaw Brzozowski, in his book

The History of the Polish Oil Industry, reminds us that Ignacy’s father was Kosciusko’s

uprising insurgent and in June 1845 Ignacy himself was sworn by Edward Dembowski

and worked with devotion to prepare the uprising for which he was sentenced and

imprisoned for 2 years. Professor Ryszard Wolwowicz in his report on 140 years of the

Polish oil industry writes that a Polish colonel was the young boy’s first teacher. This

climate shaped our hero who stayed faithful to patriotic traditions. As a mature man,

he supported the January uprising in 1863 and castaways of insurgents’ units. Being

a modest person, with a personality enticing his neighbours, as a co-funder of Zrcin

church and a founder of many schools, a supplier of free oil for the temples of

Podkarpacie as well as a philanthropist providing assistance for the orphaned and

peasant children, he lived a worthy and Christian-like life. He served people with his

advice and helped as an employer, Member of Parliament, member of the Town Council,

president of associations, a guardian of schools and many other institutions. His friend

and collaborator Teofil Merunowicz in the obituary devoted to him wrote: His main

condition of happiness was to make others happy and to lead people to the good. Hundreds or

maybe thousands of those who experienced his personal good deeds will keep him in their grateful

21


Schodnica (Poland’s former

border land)–Pasieczki oil field;

a postcard of 1900 of an

unknown author

(chromolithography).

Schodnica (Poland’s former

border land)–an oil field;

a postcard of 1899 printed by

Karol Schwidernoch in Vienna

(chromolithography).

remembrance till the end of their lives. But first of all he deserves to be named as the best and

noblest son of the whole nation. The Nation celebrates this great Pole with statues and

monuments. The Polish Senate celebrated ukasiewicz with a resolution dated February

19, 2003.

The beginnings of oil industrial utilization in Galicia

The last thirty years of ukasiewicz’s life were the pioneer years, full of work and

activities thanks to which oil and its derivatives found wide and quickly growing

application. Therefore, the memorable moment of lighting the first oil lamp at Lvov-

yczaków hospital in 1853 marks the beginning of the Polish oil industry. ukasiewicz’s

words cited in the foreword to this album perfectly illustrate what he believed in and

his passion.

Let us once again return to the events which took place in Peter Mikolasch’s

(1805-1873) drugstore Pod Zot Gwiazd [Under the Gold Star] in Lvov in autumn

1852, this time according to Melchior Wakowicz’s report from his book Sztafeta [Relay]:

...in Mikolasch’s old drugstore, up to here existing in Lvov, ukasiewicz, an outcast of the Nations

Springtide, found a shelter. [...] Abram Schreiner sneaked into the drugstore through the back

door directly to the lab, a peasant following him with a shirt pulled out from his trousers,

panting, and brought in a gallon of dark gunk. You, pharmacists, are learned people–said

Schreiner. Here is something that can burn. What can burn if not spirit? Let you Sirs build a

distillery on this lot so we shall be partners and let’s keep it in secret, shall we? A sweet picture

came to Abram’s mind: he is an owner of the business, he takes spirit directly from the ground, if

he could charge only five grejcars for one glass of vodka he would sleep on gold, anyway. In a less

funny version Abram Schreiner and Lejba Stierman from Drohobycz brought some

distillate from their own distillery with a request to specify its usefulness–thus studying

the matter according to the Austrian pharmaceutical aspect both chemists, Ignacy

ukasiewicz and Jan Zeh (1817-1897), affirmed the likeness of the stuff to the dear

Italian patent medicine on rheumatism and other diseases, Oleum Petrae Rectificatum.

ukasiewicz bought some oil which then was easily accessible in Peczeniyn. However,

they could not find many customers–patent medicine was going out of use. Mikolasch

quit the partnership, whereas the remaining two chemists further experimented outside

the drugstore. At the turn of 1852 and 1853, as a result of fractioning, they received

distillate up to 250 deg C. They refined it with sulphuric acid and soda. That was

kerosene, long yet called new kamfina. Only a lamp was missing to reach success–this

time, already without Zeh’s help, ukasiewicz with the tinsmith Adam Bratkowski

performed arduous tests and experiments which were finished with final success.

ukasiewicz was recognised as the lamp constructor (but in Vienna it was Dittmar who

got a patent for the lamp of improved construction). Schreiner helped to make a deal

with the hospital in Lvov where the lamps and 500 kg of oil were delivered. On July

31 st , 1853, the famous day took place when Dr Zaorski operated on Wadysaw Cholecki

by the new, bright light. That day marks the beginning of the world oil industry as well

as the first day of the world oil transaction. Kerosene lamps were well received in

Austria and they were further distributed to other European countries. ukasiewicz

and Zeh got a patent for the so called “cleaned oil” on December 2 nd , 1853. This

undoubtedly joint discovery Zeh attributed only to himself and in Ukraine he is perceived

as the oil discoverer.

ukasiewicz did not rest. He tried to arouse interest in kerosene by the Austrian

railway authorities. The products used for lighting before kerosene were the following:

tallow, spermaceti (cod liver oil), candles, bituminous oils made from roasted lignite

and shales; so called fotogen or hydrokarbur (hydrocarbon) was distilled from them and,

when mixed with rapeseed oil, it was known as pinolina, and when mixed with

turpentine and alcohol–as kamfina in Germany, Russia, England, Scotland and in the

USA. The famous German chemist Justus Liebig in 1863 still foresaw the development

of lighting in that direction. Therefore ukasiewicz’s accomplishment is so epoch-

23


Borysaw-Tustanowice (Poland’s

former border land)–Rockefeller

oil field; a postcard printed

by Leon Rosenschein in

Drohobycz in 1913

(coloured phototypography).

Borysaw (Poland’s former border

land)–a view of oil rigs in

a decorative vignette of stamps;

a postcard printed by J. Klein in

Cracow in 1908 to commemorate

the 60 th anniversary of Kaiser

Francis Joseph’s reign

(coloured phototypography).

making. On the other hand, gas lighting had been known since 1789–gas was made

of coal. Kerosene was about 30% cheaper than German hydrocarbur. The first street

oil lamp in the world flared up in Gorlice in 1854–that is where ukasiewicz lived as

a tenant of a local drugstore. In 1854 he discovered oil in a forest near Bóbrka village

and the first rock oil well in the world came into being there as well as the first oil

distillery, which was commemorated by its founder with an obelisk laid in 1872 at

the site where today there is a museum-heritage park and oil is still produced.

ukasiewicz was recommended to Tytus Trzecieski (1811-1878), a well-off landowner

from Polanka (district of Krosno) by influential officials from Lvov: Karol de Lance

and Felicjan Laskowski. Thus, a training ground for testing new techniques and

constantly growing oil yield came into being on the land belonging to ukasiewicz’s

neighbour–Karol Klobassa Zrcki (1823-1886), the owner of Bóbrka as well as thanks

to Klobassa and Trzecieski’s capital, ukasiewicz’s talent and technical skills of Adolf

Jaboski (1825-1887) and Henryk Walter (1835-1921). In 1856 ukasiewicz founded

his own distillery in Ulaszowice–today a district of Jaso–on the lot belonging to

Tytus’ brother–Franciszek Trzecieski.

Other claimants to the victor’s palm

In 1857 the distillation of oil started in Romania which is recognised as the

beginning of the Romanian oil industry.

American literature dates the beginnings of the oil era for the year 1859 when

the famous Drake drilled the first oil rig in Titusville in Pennsylvania and in 1861 the

first refinery called Oil Creek was started up. When Drake was drilling that oil well,

the streets of Bucharest were already lit with kerosene. Though in Russia, Burma and

Canada oil was already earlier produced on the trading scale. It is Drake, and the year

1859 which is recognised as the main date in the history of the world oil industry. The

fast development of this new branch caused that in 1865 thousands of oil rigs and

hundreds of refineries were in operation. Crude oil is the miracle of the 19 th century–

similarly as steam was the miracle that changed the 18 th century. A lot of history of oil

can be found in books by two Americans: Harvey O’Connor or Daniel Yergin, president

of CERA, a well-known consultative company dealing with energy matters, and a

laureate of a prestige Pulitzer prize in the USA in 1992 for the book The Prize (translated

into Polish as Nafta, wadza, pienidze [Oil, Power, Money]).

Great works of Galicia pioneers

In 1858 at a local agricultural-industrial exhibition in Jaso, ukasiewicz presented

crude oil from Bóbrka, kerosene in two varieties, oil for machines, gunk for axis oiling

and for roof or fence protection against rotting, bitumen on floors in farm buildings

and gudryna–raw material for production of wax candles. The exhibition was a success.

These products were to be also awarded at the general exhibition in Vienna in 1873

and at the national exhibition in Lvov in 1877.

In 1859 the well-off and well-connected brothers Apolinary and Edward Zieliski

(Edward Zieliski later became member of the National Government during the

January Uprising) discovered abundant sources of waxless oil in Klczany. After some

vicissitudes connected with that discovery, ukasiewicz quit the company dealing with

processing of that oil. In 1860 a fire destroyed ukasiewicz’s refinery in Ulaszowice

(peasants did not allow to rebuild it; remnants of foundations are still there) after

which he left Jaso where he had been living after the departure from Gorlice in 1858.

No longer did he run drugstores–the passion for oil completely absorbed him. However,

some failures and the family tragedy–daughter’s death–almost caused his permanent

departure to Lipno district in the Congress Kingdom. Then Trzecieski came back from

abroad and together with Klobassa persuaded ukasiewicz to establish a new company

of three, similarly as previously Trzecieski had set companies with each of them

separately. The partnership lasted from 1861 to 1868–ukasiewicz quit it claiming

25


Borysaw-Tustanowice (Poland’s

former border land)–Stefania oil

field; a postcard printed by Leon

Rosenschein in Drohobycz in

1913 (phototypography).

Borysaw-Tustanowice–aszcz 1

oil field; a postcard printed by

Leon Rosenschein in Drohobycz

in 1913 (phototypography).

Borysaw-Tustanowice–a general

view of oil fields;

a postcard printed by Leon

Rosenschein in Drohobycz in

1908 (phototypography).

that it brought too little profit and harmed his partners. He became the manager of

Bóbrka oil well which soon became Klobassa’s property after Trzecieski’s resignation

(probably in 1871). Klobassa gave ukasiewicz a free hand with regard to Bóbrka

development. This is how that prominent though modest inventor was saved for the

Polish oil history by these reasonable and trustworthy men. At that time ukasiewicz

started up a refinery in Polanka (1861) and Chorkówka (1865). Soon, that pioneer

period for ukasiewicz was to be completed. That refinery, being his last one, the

largest and the best one in Galicia, after ukasiewicz’s death became the property of

W. Stawiarski and W. Fibich and till 1904 was the facility in which the oil processing

technology was being perfected–Similarly as the Bóbrka oil rig which was the best one

in Galicia serving as a training ground and the school of specialists of oil industry.

Initially, oil wells were dug out by hand and they were reinforced with wood.

Henryk Walter, a graduate from Leoben, the January Uprising insurgent, an adviser to

ukasiewicz, in 1862 used for the first time a free-fall drilling system for drilling through

hard sandstone. In 1866 he imported a better version of Fabian’s jars for manual hammer

drilling on a poling conductor. It is he who implemented the first methods of isolating

water in underground deposits as well as applying a manual deep-seated pump. As far

as laying out of bore-holes is concerned, ukasiewicz was assisted by a graduate from

Freiberg, Juliusz Noth (1840-1922), who in turn recommended a German newcomer

from the USA, Albert Fauck (1842-1919). It is Juliusz Noth and others who in the

seventies of the 19 th century laid the foundations of oil geology as a trend of regional

applied geology. In 1867 Albert Fauck introduced a steam drive for drill rigs and in

1870-1872 the Pennsylvania rope method was applied in Klczany, Bóbrka and

Ropienka. In 1868 there were already 84 oil wells in Bóbrka. One of these oil wells

provided mineral water as in Iwonicz-Zdrój, where in 1874 a healing institution with a

pump-room was founded to function till water depletion. After that the well turned

out to be an oil-bearing one. Also, in Bóbrka a steam drive for pumps was used for the

first time. Adolf Jaboski, the former exile to Siberia for conspiracy activities, in 1870

was sent by ukasiewicz to the USA from where he had come back in 1873 with new

and better drills. He also improved the method of water isolation.

Not only oil wells, refineries, oil and its products but also written word were the

fruit of these men’s work. In 1870 Antoni Teleyski published the book Olej skalny i

jego zastosowanie w przemyle i yciu codziennym [Rock Oil and its Use in Industry and

Everyday Life]. A year later Szczsny Morawski, in his book wiatek Boy i ycie na nim

[God’s Small World and Life on it], described a visit in Bóbrka as well as an interview

with ukasiewicz. In 1875 Edward Windakiewicz published a book Olej i wosk ziemny

w Galicji [Oil and Earth Wax in Galicia], first in German (in Vienna) and then in Polish

in Lvov. In 1880 in Cracow Arnulf Navratil published a book O nafcie i innych wyrobach

galicyjskiego oleju skalnego [On Oil and Other Products from Galicia Rock Oil]. In Vienna

Henryk Walter and Emil Dunikowski published the work Das Petroleumgebiet der

galizischen Westkarpathen. In 1882 in Gorlice the first oil periodical called Górnik [Miner]

was published. Thanks to the Krajowe Towarzystwo Naftowe [National Oil Company]

which was founded in 1880 and chaired by ukasiewicz, a periodical Nafta [Oil] came

into being. Adolf Jaboski in 1885 published a book Kopalnictwo naftowe [Oil Mining].

The same year M. Malanko published a book Zarys kopalnictwa naftowego [An Outline

of Oil Mining] in Stanisawów. R. Zaoziecki (1861-1916)–a disciple of professor

Bronisaw Pawlewski (from Pock region) who was the author of Technologia nafty i

wosku ziemnego [Technology of Oil and Earth Wax], published in 1891–wrote a book

Technologia nafty do uytku organów kontroli skarbowej i fabrykantów [Technology of Oil for

the Use of Treasury Control Organs and Manufacturers] in 1894. ukasiewicz did not

publish anything and his notes commenting lab tests and experiments did not survive.

In 1875 Windakiewicz founded 111 oil wells in Bóbrka: 60 were inoperative

and 51 in operation, some of them were drilled down even to 450 m. At that time,

however, less oil than in Borysaw was produced there, though this oil field was still in

27


Borysaw-Tustanowice–a general

view of No. III oil field; a

postcard printed by

Leon Rosenschein

in Drohobycz in 1908

(phototypography).

Borysaw-Tustanowice–a general

view of No. V oil field; a

postcard printed by

Leon Rosenschein

in Drohobycz in 1913

(phototypography).

Borysaw-Tustanowice–a general

view of No. VI oil field; a

postcard printed by

Leon Rosenschein

in Drohobycz in 1913

(coloured phototypography).

second place. Windakiewicz enumerated the following localities in Galicia where oil

was discovered and produced: Bóbrka, Powce, Ropianka, Siary, Skowa, Ropica,

Harklowa and others. Borysaw, Bóbrka, Kryg, Lipinki, yny, Soboda Rungurska

and a few other places were then the essential sources of oil. In 1874 in Borysaw an

oil well Potok [Stream] produced about 40 tons of oil per day! That was a forecast of

a new stage of oil industry development in Galicia.

Oil processing was ukasiewicz’s domain. He covered a long road from his lab to

the refinery in Ulaszowice, Klczany, Polanka and Chorkówka, from iron retort boilers

to distillation processes heated with wood. Till 1862 in the process of refinement he

had used smoky sulphuric acid and for leaching he had used wooden pots. Then,

almost simultaneously with Americans, he applied agitators. He produced exceptionally

good types of kerosene “Standard” and “White Standard” with which he interested

Romanians and Americans. John Rockefeller himself supposedly visited him; an

Austrian oil potentate Gustaw Wagemann certainly did it too. Initially he owned a

few shops in Tarnów, Cracow and Warsaw, then he only ran a wholesale trading company.

In 1866 ukasiewicz with his company partners established an oil well in

Ropianka, in 1873–in Wójtowa, in 1874–in Ropa, in 1875–in Smereczne, in 1881–

in Wilsznia. In the year of his death (1882) about 50,000 tons of oil were produced

annually and the Chorkówka refinery processed 3000 tons of crude oil per year. In

the Gorlice region, the largest as far as crude oil is concerned, oil was produced in

almost 20 sites with operational refineries. In 1881 oil production reached 7300 tons,

in 1883 as much as 51,000 tons and Poland was the third in the world after the USA

and Russia. There are still three active oil wells dating from the 19 th century, including

the oldest one in Wakowa from 1848; until recently, the oil from Wakowa was

pumped directly into tank cars at the Olszanica railway station.

Already during ukasiewicz’s life in Galicia there appeared his successor, also a

pioneer of the Polish oil industry, Stanisaw Szczepanowski (1846-1900). This

thoroughly educated young but already experienced man arrived in Galicia in 1879

with the intention to help this poor province and it is the oil industry that filled him

with hope. He selected the village of Soboda Rungurska (Koomyja district) for his

activities and not the oil-bearing areas of Gorlice, Krosno or Borysaw. There was the

so called government property where as early as 1771 the first oil well was dug out

which in 1874 produced about 50 kg of crude oil daily. Oil was processed in distilleries

in Kosowo and Peczeniyn. Szczepanowski also drilled an oil well and by applying the

method of steam percussive drilling he reached considerable efficiencies of oil production.

In 1880 in Soboda he established the first factory in Galicia manufacturing mining

machines and equipment. In 1881 he produced a lot of oil and there was a problem

with its storage–Soboda was the largest oil field in Galicia. One could notice the so

called oil fever and a run on Soboda. Szczepanowski founded a company, took credits

and in 1883 constructed the largest refinery in Galicia–in Peczeniyn–which for some

time was the third refinery in Europe. It had tanks, oil pipeline, gas and a refinery

wastes heating system. In 1884, thanks to deeper drilling, the production of oil greatly

increased. At that time Szczepanowski assembled a group of serious businessmen and

oil technicians. History quotes over 20 surnames. Szczepanowski engaged an insurgent,

member of the National Government, an oil industry pioneer, Mikoaj Fedorowicz as

well as managers from Ropa and Siary distilleries, Piotr Brzozowski and Felicjan

odziski. Felicjan odziski, a technical manager of the company Wolski & Co. at

the age of 85, together with his wife, were taken away by Russians to exile to Siberia

where he died of hunger in 1941. Felicjan’s son, Wodzimierz odziski, was to continue

his father’s work in the oil industry but he also experienced misfortunes at the times of

the historical, national upheavals. His life included Pisudski’s legions, Russian exile,

the Bolshevik revolution, then 20 years of free and independent Poland and again war.

Such a fate touched millions of Poles. In 1887 Szczepanowski was ousted from Soboda

and soon also from the refinery in Peczeniyn. In 1887-1889 he owned small oil wells

29


An oil field in Potok

near Krosno; a postcard printed

by Bernard Fischbein in Krosno

in 1900 (phototypography).

An oil field in Potok

near Krosno; a postcard printed

by Bernard Fischbein in Krosno

in 1910 (phototypography).

in Równe and Wietrzno (Krosno district) and in 1889-1894 he had an oil rig in Siary

near Gorlice–all of them managed by F. odziski. He was the first one who drilled in

Bitków but without success. He also drilled with poor results in over 10 localities and

just in Schodnica, where a shallow oil well had existed since 1855 (drilled by the owner,

duke Schwarzenberg, and then Maria Lubomirska) and since 1888 Szczepanowski managed

to attain from deeper wells better efficiency than in Borysaw or any other oil well of

Galicia. But he also lost Schodnica. It was taken over by Wolski and Odrzywolski, Co.

which in the period from 1893 to 1899 was owned Schodnica, Kosmacz, Grziowa,

Kropiwnik, Paszowa, Truskawiec and then Borysaw, Tustanowice as well as the

Mislisoare Valley and Campina-Busztenari in Romania. The whole Szczepanowski’s

personnel came to Schodnica which soon became a pure Polish oil field in distinction

from already international Borysaw. For his achievements Szczepanowski was rewarded

at exhibitions in 1882 in Przemyl, in 1887 in Cracow, and in 1894 in Lvov for soil

profiles, drill logs, geological maps, oil rig and for the best oil from Peczeniyn. To the

advantage of the oil industry, he managed to conduct an action of customs protection,

then the reduction of railway fares for oil products as well as the decrease of taxes in

this industry. From 1886 to 1897, he was an MP at the Viennese parliament and from

1889 till 1899 in the National Lower House. In 1884 he published the work Nafta i

zoto, praca i boto [Oil and Gold, Work and Mud] and in 1888 Ndza w Galicji [Misery in

Galicia] in which he criticized apathy and the lack of commitment. Then, in the

period from 1890 to 1896 he worked in the editorial staff of the exclusive quarterly

Ekonomista Polski [The Polish Economist] (Lvov) in which, thanks to his several press

releases, he went down in history as a precursor of National Democracy. In 1891 he

established, together with a poet Adam Asnyk, the Society of People’s School, he was

also the creator of the Polish cooperatives’ head office in Galicia. The daily paper and

the publishing house as well as his broad social activity got him enemies and his not

always honest business practices made him a debtor and defendant. He was defended

by such famous writers as Prus or Sienkiewicz. That opportunity was used by the

foreign capitalists who mastered the oil industry. Szczepanowski and ukasiewicz

were so different and alike at the same time–patriots, stubbornly aiming at their

objectives, disinterested, modest and dedicated. Szczepanowski, like a meteor on the

Galician firmament, bestowed an European flourish to the Polish oil industry. He

inspired the young generation with his discoveries, but, being a straightforward man

and despite his unusual abilities, he ended up as an unhappy person. ukasiewicz is

commemorated with statues whereas Szczepanowski has a few streets named after

him in Warsaw, Cracow and Pozna as well as a modest statue in the yczaków

cemetery in Lvov. The greatness of this figure is not questioned by anybody–he was a

symbol of our oil industry’s fight for independence, an exceptional personality who,

together with ukasiewicz, somehow also deserved the eternal memory in the pantheon

of great Poles.

The turn of the 19 th and 20 th century was filled with a wave of oil discoveries in

almost the whole Podkarpacie province. The following oil deposits were discovered at

that time: Turzepole-Zmiennica (1883), Potok and Wakowa (1885), Krocienko

and Witryów Homcza (1886), Biecz (1887), Wglówka (1888), Rudawka

Rymanowska (1889), Iwonicz Zdrój (1890), Kobylany (1891), Turaszówka (1892),

Stara Wie (1896), Grabownica (1898), Tarnawa Wielopole (1900) and Mokre (1913).

Effective exploration was performed in the region of Borysaw–apart from Ratoczyn

and Wolanka, oil was found in Tustanowice (1895) and Mranica (1911). Further

eastwards the oil production was undertaken in Majdan, Pasieczna and Strzelbice

(1886), Rypne-Dubie and Schodnica (1890), Urycz (1895), Bitkow, Kosmacz and

Opaka (1899). The following oil wells were also active in that period: Gorlice, Glinik,

Magdalena, Ropa, o, Ptna, Mcina, Kobylanka, Rozdziel, Wójtowa, Pagorzyn,

Skowa, Powce, Librantowa, Wietrzno and Równe, Ropienka, Humniska,

Klimkówka, Libusza, Dominikowice, Ropica Polska and Ropica Ruska.

31


An oil field in Potok near Krosno;

a postcard printed by

Bernard Fischbein in Krosno in

1907 (phototypography).

An oil field in Potok near Krosno;

a photographic postcard by

R. Kaska from Krosno,

about 1930.

Shallow and primitive methods of oil production did not bring expected results

in comparison with hammer drill methods applied with success on the other

hemisphere. Therefore in the beginning of 1880 a partnership Jana founded with August

Gorayski, Adam Skrzyski and ubieski invited a Canadian William Henry Mac Garvey

(1843-1914), a pioneer, inventor, organizer and administrator, a man of steadfast will

and great diligence who brought credit to the Polish oil industry. The company Bergheim

(John Bergheim–a Viennese banker) & Mac Garvey in 1882 applied already famous

Canadian drilling. At that time those areas went through the period of boom. Up till

1894, the company built 370 oil wells in 43 localities of the total depth of 100 km. In

1883 the company founded Fabryka Maszyn SA Glinik [Factory of Machines joint

stock company Glinik] existing at present. The factory later became famous worldwide

thanks to production of machines, oil well and mining equipment, refinery apparatuses

and equipment, casts, constructions, tanks, barrels as well as overhauls and repairs.

The company, later transformed into Galicyjskie Karpackie Naftowe Towarzystwo

[Galician Carpathian Oil Company], established a plant in Tustanowice, the then centre

of oil production. TEPEGE (today’s Naftomet), a production and repair company, was

founded in Krosno. In other places the following firms worked for the oil industry

being well provided: Towarzystwo Akcyjne L. Zieleniewski [Joint-stock Society

L. Zieleniewski] in Cracow and Sanok, the factory Perkins-MacIntosh and Perkins in

Stryj with its branch workshops in Borysaw and Tustanowice, the factory Roman

Gierszyski in Tustanowice, a plant W. Wolski & K. Odrzywolski in Schodnica,

workshops Dudziak-Mermon in Wolanka and workshops J. Dawidowicz in Borysaw,

Warsztaty Mechaniczne Taran [Mechanical Workshops Taran] in Tustanowice.

Additionally, oil wells workshop back-up facilities provided services in Borysaw and its

later districts, Tustanowice, Mranica and Wolanka, as well as for oil rigs in Rypne,

Bitkow, Nadwórna, Wakowa, Grabownica, Krocienko, Potok, Równe, Kryg and

others.

The scale of the gigantic jump which the oil industry has made since the 19 th century

till today is presented in Table 1 (in thousands of barrels–1 metric tone equals 7.3 barrels).

The cited quantities are outright indispensably necessary every day now! And also

formerly–as one can see in the Table–we were the third oil power in the world!

In 1900, less oil than presented in Table 1 was produced in Canada, Peru, Germany,

Italy and Japan. Table 2 shows production and processing of oil in the period

1905-1912 in thousands of metric tons in Galicia and Austria.

Oil was quite often processed on the spot, near oil wells, in small distilleries. At

that time in Podkarpacie province, from Klczany in the west to Soboda Rungurska in

the east, there were over 60 distilleries and refineries of various sizes. Some authors

claim that there could be over a hundred of them–they were founded and went bankrupt

depending on the economic situation. Other studies state that there were about 80

distilleries and refineries in 60 localities, whereas at the end of the 19 th c. there were

about 40 refineries in working order. In 1910 there were only 35 and in 1926 only 29

refineries. Some of them were commemorated with postcards. In 1885 Bergheim &

Mac Garvey worked out a project to develop a distillery in Glinik into a comparatively

large oil processing plant, the future Oil Refinery in Glinik for which the Factory of

Machines functioning in the same place and under the joint management manufactured

apparatuses, tanks, devices and other equipment necessary for the refinery operation.

Significant refineries which were built at that time include Glinik Mariampolski (1886),

Peczeniyn (1887), Jaso (1888), Targowiska (1890), Trzebinia (1895), Jedlicze (1902),

Krosno (1905), Czechowice (1907) and Drohobycz (1912). Distillation equipment was

very primitive at that time–gasoline which was thought useless, was poured into rivers

or streams. The distillatory boilers covers were helmet-shaped–those were partial

condensers which reduced the loss of valuable kerosene. Pipe coils were plunged in

water and served as coolers. As early as 1890, the so called coke distillation was conducted

in small boilers, which often burnt through. Refinements, products of wax and bitumens

33


Krocienko near Krosno–an oil

field. A postcard dated 1910,

printed by Bernard Fischbein

in Krosno (phototypography).

Wglówka near Krosno–an oil

field. A postcard dated 1914 and

mailed in 1918, printed by

Bernard Fischbein in Krosno

(coloured phototypography).

Grabownica near Brzozów–an oil

field. A postcard by an unknown

author, mailed in 1937.

were added to the primitive distilleries. At the end of the 19 th c., kerosene made up

75% of the oil products. There were five different types of kerosene produced at that

time and their density was measured in the Beaume’s scale. In Poland in 1938, out of

500,000 tons of processed crude oil, the demand for kerosene reached 100,000 tons.

The oil industry operated much worse than the western one–the production went down,

the risk of purchase of new licenses and systems rose. Refineries often changed their

owners, they were rented, shut down for longer periods, there were fires, bankruptcies

and later even the lack of feed stock. There is not sufficient information but it is known

that the medium size and larger refineries were not Polish. In the region of Borysaw-

Drohobycz there were about 30 distilleries and refineries. Till the end of World War I,

Polish refineries used to export their products practically all over the world.

In the period 1882-1910 the problem with gas, which was so uncomfortable

and dangerous while drilling, was solved. First it was used for heating and lighting

up of back-up facilities at oil fields.Then they drilled down to gas deposits and laid

gas pipelines leading to refineries. A gas absorption plant belonging to engineers

Wadysaw Szaynok (1876-1928) and Marian Wieleyski (1879-1945) was started

up in 1914. However, the development of the gas industry was to take place later.

The first stage of the history of the Polish oil industry ended in 1896 when

Wadysaw Dugosz, the later organizer of “Falcon’s” military units and the leader of

the Independence Committee, completed the first oil well in Borysaw called Na Potoku

[By the Stream] with the output of 40 tons per day. In 1893 Mac Garvey explored oil

in Tustanowice. In 1895 Mciski, Pocki, Sroczyski and Suszycki were looking for

oil. Thanks to Dugosz’s discovery, a considerable portion of the drilling operations

was moved eastwards and the Borysaw region entered history. Borysaw became the

unofficial capital of the Polish oil industry. In 1901 the Karpackie Towarzystwo Naftowe

[Carpathian Oil Company] and Nafta [Oil] oil wells produced a dozen or so thousand

of tons of oil each. In 1904 in Tustanowice the oil rig Wilno [Vilnius] produced 400

tons per day, and the oil well Litwa [Lithuania] 800 tons daily. That was the golden

age of the Polish oil industry. Today already legendary oil well drilled in 1908–Oil

City–produced 2500 tons per day. Here are words of the then chronicle: ...in the first

24 hours two pumps managed to pump 140 tank cars and at least the same quantity was spilled

over in the fields. The production rapidly increased, more and more powerful oil rigs were built

while larger and larger areas of fields were covered with spilled oil. On July 4, 1908 a powerful

fire caused by lightning broke out and lasted three weeks–the glow was seen even

from Sambor. Generally 127 oil wells from the region of eastern and western Podkarpacie

are cited in materials on the Bóbrka heritage park. Apart from the above mentioned

oil wells it is worth showing those from the vicinity of Bochnia, Krosno or even Stryj.

Oil has been well-known for ages, coming from natural effluents and wells in the

region of Scz, Gorlice, Krosno, Sanok, Sambor, Drohobycz, Nadwórna, Kosowo

reaching up the Romanian Carpathians. In fact, as late as in 1861, the depth of oil

wells reached 150 m., in 1881–230 m., in 1896–612 m. and 1273 m. in 1906. The

depth of 2274 m. was reached in 1934 using the hammer drilling method.

In 1860 a mineral called ozokeryt (ozokerite) was industrially produced. The name

of that mineral was made up by an Austrian mineralogist Glockner in 1850. This

mineral is found in very few places in the world and is commonly known as mineral

wax, containing hydrocarbons of carbon atoms number from 29 to 55. Its melting

temperature is 30-98 deg. C and it comes in 4 types which are used mainly for the

production of candles. The main mining centers were Borysaw, Dwiniacz, Starunia

and Truskawiec, but apart from them there were also about 15 sites of its occurrence

in western Podkarpacie and 23 places in eastern Podkarpacie. In the peak year of

1873 in the vicinity of Borysaw there were about 12,000 wells located. From one

there was about 3 to 8 meters to another and supposedly about 10,500 people were

employed there at that time; the majority of them were so called ebaks–collectors of

oil and ozokerite crumbs. In that period the most mineral wax was produced, i.e.

35


Iwonicz Zdrój near Krosno.

A postcard printed by

Wydawnictwo Turystyka

in Krosno in 1939.

about 20,000 tons which was exported to various regions of the world–in the whole

history 400,000 tons is reported to have been produced. Only one mineral wax field

in operation survived up to WW II in Borysaw.

The second stage of the development of the Polish oil industry has had many

heroes: Professor Rudolf Zuber (1858-1920), a world class geologist who contributed

considerably to the growth of the Polish oil industry and especially the oil geology as

well as to the development of Polish health resorts (spas), an engineer Wacaw Wolski

(1865-1922), the inventor of the battering ram for deep drilling, August Gorayski

(1832-1915); Wojciech Biechoski (1839-1926), an insurgent and the member of

the National Government, cooperating with ukasiewicz in Krajowe Towarzystwo

Naftowe [National Oil Company]; Zenon Turczynowicz-Suszycki (1840-1912), a

fighter in the January Uprising in Lithuania, an expert and founder of the vocational

school of Canadian drilling in 1885 as well as Stanisaw Olszewski (1852-1939),

probably the most active person among the authors and editors of the technical press

in the whole history of the Polish oil industry. It is worth mentioning that many

people working in the oil industry made a serious contribution in the January Uprising–

for example the owner of the properties in the Polish Kingdom and afterwards the

owner of oil rigs in Galicia, cavalry major Bronisaw Deskur or an engineer of the oil

industry, major Józef Leniecki.

Shipment, transportation, storing and trade were run by firms of various sizes,

with national and foreign capital, by strong and durable ones, weak and disappearing,

and sometimes by fraudulent firms. Well-known companies were Premier, Galicia,

Karpaty and tens of others. The technical level of those firms varied from very

primitive to very high, the latter going to the credit of experts-graduates from

mining academies in Leoben, Freiberg, Pribram, Lvov and from higher technical

schools in Lvov, Prague or Vienna. Mining schools have existed in Ropienka, then in

Wietrzno and Borysaw since 1885. Many books and works on the oil geology, the

oil industry or oil law (including belle lettre ones) were published at that time. Several

periodicals were dedicated to oil. After Górnik [Miner], published in 1882-1886 in

Gorlice, the next was Przegld Górniczy, Naftowy i Techniczny [Mining Technical and

Industrial Review], published since 1889; Nafta [Oil] in Lvov in 1893-1914; in 1894-

1895 Sprawozdania Krajowego Towarzystwa Naftowego [Reports of the National Oil

Company] in Jaso; in 1900-1911 Polski Kalendarz Naftowy [Polish Oil Calendar]; in

1911-1914 in Borysaw Ropa [Oil] in Polish and German; in 1912-1914 in Lvov

bilingual Gazeta Naftowa [Oil Gazette]; in Drohobycz in 1912: Oleum. Przewodnik po

Przemyle Naftowym [Oleum–the Guide Through the Oil Industry]; in 1912-1914 in

Borysaw: Dzienne Wykazy Galicyjskiej Produkcji Ropy Naftowej [Daily Reports of the

Galician Oil Production] whereas many other periodicals and papers edited columns

or releases on oil.

It is then that the creative life of Stanisaw Pilat (1881-1941) began. Having

receired the degree of Ph.D. at Leipzig Technical University and after studies at home

and abroad he began working in the Galicyjskie Towarzystwo Naftowe [Galician Oil

Company] in Borysaw in 1904. The next year he worked in the refinery at Pardubice,

in 1906-1908 in Krosno refinery, then in the refinery Vega in Ploiesti, from 1909 to

1918 in Drohobycz in the factory which later was named Polmin Refinery. Gaining

experience while supervising motor oils distillation, he ran the assembly of deep vacuum

distillation systems and plants. He also worked on methods of cleaning waste processing

waters, he supervised the revamping of the future Polmin refinery and he worked on

gasoline rectification using heat coming from burning of residues. His engineering

design of the distillation process, ordered by the Pearsons company in 1912, was

finally completed in the Mexican refinery of Minatitlan. Plants according to his knowhow

were erected in Drohobycz and the patent of emulsion breaking was born there.

A further period of his life, already in free Poland (1918-1939), brought a splendid

development of that great man of Polish oil.

37


Ratoczyn near Borysaw.

Workshops and oil rigs

of Galicyjsko-Karpackie

Towarzystwo Naftowe (formerly

Bergheim&Mac Garvey).

A postcard of 1902 by Wilhelm

Russ, a photographer from

Drohobycz (phototypography)

Galicyjsko-Karpackie

Towarzystwo Naftowe (formerly

Bergheim & Mac Garvey).

Ratoczyn near Borysaw.

A photo postcard of 1929

by W. Selinger, a photographer

from Borysaw.

In 1902 the oil production on the Polish territory reached 576,000 tons. The

period of oil overproduction began in the years 1902-1909. In 1903 the world produced

25.64 mln tons of oil whereas Borysaw produced over 524.5 thousand tons. In 1908

the process of integration started due to the economic crisis and growing costs of

production. In 1909 a record of oil production in Galicia was set: 2,076,740 tons; it

was 5.22% of the world production which at that time came up to 39.86 mln tons. In

1910 the world oil production share was the following: USA–63.16%, Russia–21.87%,

Galicia–4.06%, Dutch India–3.44% and Romania–3.11%.

Thus, out of nearly 40 million tons of oil produced all over the world, Poland was

the third power in this industry! High efficiency caused the drop of oil prices whereas

the lack of storage capacities, fires and damages led to a crisis. Size reduction of

enterprises–340 firms with 75 oil rigs–caused that around 1908 the process of integration

was started mainly by foreign capital. The predominating companies then were the

Galician Carpathian Oil Company, David Fanto und Co. and Nafta AG, and Galicia.

This splendid past was outshined by achievements in other places on the globe.

One might express his sorrow citing Petrarka (Petrarka–somehow an oil-sounding

name), though the quotation is taken from completely different circumstances: tempo

passato, perche non ritorna piu?, that such a beautiful time of development and enthusiasm

does not want to come back to us in free Poland.

The nineteenth century–world career of oil

And yet the date of August 27 th , 1859, and Edwin Drake’s discovery of oil in Titusville,

Pennsylvania, marks the beginning of the world oil history. Already in 1860, there were

20 refineries in the USA. In 1865 (yet acting unofficially–officially since January 10, 1870),

Standard Oil had 30 such plants and 5 years later reached 10% of the US market whereas

in 1879 it had 90%! The scale of production affects costs, therefore three Standard Oil

refineries produced a quarter of the whole world oil output. In 1891 the largest world

refinery in Whiting (Indiana) was erected (there at Amoco, now BP, much later constructed

a crude oil distillation plant, a unit of 11 mln t/a, even a hundred years later was still the

biggest one). 1866 marks the beginnings of oil pipelines. Tank cars and tank trucks came

into effect at the end of the 19 th c. Tank ships already existed at that time. As early as

1865, Standard Oil started to integrate refineries with the market and in 1891 they began

to produce crude oil. Already in 1872, they started a price war thus eliminating competitors,

they applied dumping of their firms, they used a trust system which is opposite to a

shareholding system–dependent firms are stockholders. This company with its bad image

was an object of numerous complaints and law suits. Exploration and drillings are very

expensive–whereas production is relatively cheap. However, it is a risky business. Oil

processing requires much investments in a refinery. Eventually, trade and logistics give

profits. The best situation is to have all of these elements in one hand and most preferably

in many countries–then the risk is minimum. John D. Rockefeller, the founder of Standard

Oil and probably the biggest figure of world oil, perfectly understood that logic. In 1880

the company supplied petroleum products worldwide using sea tankers for transportation.

The concern applied blue barrels (bbl) with capacity which in 1482 king Eduard IV ordered

as the measure of herring fishing in the North Sea (nomen omen, these are not herrings

which are weighed with this measure today), equal to 42 gallons, that is exactly 158.97

litres which till today is accepted as the most basic oil capacity unit. Within 25 years from

the first oil well drilling, this company became the largest exporter in the world, operating

without any competitor! These are the things which the stunned world witnessed!

Oil was discovered in many states in the USA–for example in California. Union

Oil (today’s Unocal), which had existed since 1890, started oil production as early as in

the 1890’s. Texas had produced oil already in 1892 and the oil boom caused that in

1901 oil was cheaper than water. In the 1870’s and 1880’s, over half of the world oil

export came from the USA: 90% by Standard Oil and, later, 10% by the Mellons, a

bankers’ family with a lasting place in history.

39


Borysaw (Poland’s former border

land) Wolanka oil rigs,

a postcard printed in 1900 by

an unknown author, on the basis

of a photography by

Wilhelm Russ in Drohobycz

(phototypography).

Borysaw–a view of Mranica

a postcard printed by J. Pilpl

on the basis from Drohobycz

(coloured phototypography).

In Baku, oil was produced in rummaged wells and drilling was applied as late as

1871/1872. In 1873 there were 20 refineries there, in 1880–already 200. In 1888

Baku produced 80% of the oil quantity which was produced in the USA at that time.

Oil export from here made up 31% of the world output. Batumi has been an oil

harbour since 1883 through which oil was transported, among others, to the Fiume

refinery (Rijeka) owned by the Rothschilds. The main export was performed that

way. In 1875 the Nobel brothers arrived in Baku and in 1883 they already controlled

51% of the oil market. Soon baron Rothschild’s Paris bank house joined them. Both

groups quickly developed European networks and they broke the monopoly of Standard

Oil. Powerful Germany, where Standard Oil was predominant, tried to reach for oil in

Galicia and Romania to accomplish its military endeavors. That was the region where

the Nobel brothers or the Rothschilds multiplied their fortunes. Our countryman,

Witold Zglenicki from Mazovia province, went down in history for his accomplishments

there. Oil was discovered on Borneo in 1897 and the next year a refinery was built

there. Oil was also discovered on Sumatra where, since 1890, the Royal Dutch had

been operating and was sponsored by the king.

The Scottish firm Burmah Oil, established in 1866 (and known for its Castrol

oils–now in BP) transported to India products from the refinery in Rangoon. Shell

and Royal Dutch mastered over half of the trade with Russia and Asia.

In the 19 th century baron Reuter, later to be well-known for his information

agency, was looking for oil in Persia but without any success. In 1860 Russia wanted

to occupy that country and in 1885 declared war against Afghanistan. Russia wanted

to lay pipelines from Baku through Persia but England was against it. It reminds us

of a bit less distant times, though...

All these stories sound as if you heard about the gold rush–that was the pace and

momentum of the desirous world. Kerosene was the product which replaced previously

used lighting materials (tallow, spermaceti, coal and shale oils like fotogen, hydrokarbur,

pinolina, kamfina) manufactured by the already then powerful industry; it was the

19 th century miracle, like the steam engine which altered the 18 th century. Oil

distillation and refining processes were rapidly developing. The oil industry produced

lubricants, wax, or candles; gas oil was refined into gas used for illumination or heating.

Bitumen had already been known since 1890; gasoline was useless and dangerous–

many fires and explosions were reported at those times. Fuels made of oil were used

for the production of steam on ships and railway steam engines. Edison’s invention in

1882, i.e. the electric bulb, caused the slow death of kerosene whereas Rudolph Diesel’s

invention of his famous engine in 1897 and an eleven year older invention of a gasoline

engine opened perspectives of a completely new world in which oil reigns up till

today. Oil production, which in 1875 did not reach even 10 million barrels, in 1900

was estimated to have reached about 146 million, that is about 20 million tons, out of

which 50% came from Russia, a little less from the USA and about 300,000 tons

from Poland. The rest came from Dutch India, Romania and Burma. In 1900, in the

USA, there were already 8000 motor vehicles.

Oil becomes indispensable... beginning of the 20 century

The 20 th century brings fast progress–18 million electric bulbs shine in 1902

and the first airplane was constructed in 1903. Henry Ford left Edison’s bulb factory

and thanks to him in 1905 there were more combustion engines than steam and

electric ones. The gasoline engine defeated other engines. The first filling station was

built in the USA probably in 1907–previously gasoline was sold in shops. In 1909,

American gas stations and workshops already sold 42% of the petrol and in 1911 the

demand for petrol was bigger than for kerosene. Compression-ignition engines used

fuel which was heavier than kerosene, i.e. gas oil (it was so called because that fuel

was processed in illumination gas or heating gas retorts\; it was produced from shales

and tars).

41


Rypne near Dolina (Poland’s

former border land), Podlasie XI

oil rig; a postcard by an

unknown author and mailed in

1928; black and white print.

Bitków (Poland’s former border

land), a postcard printed

by B. J. Harz in Nadwórno

and mailed in 1903

(phototypography).

In 1911 the First Admiralty Lord, Winston Churchill, observing the growing

German threat and its desire to rule the world, began to transfer Albion’s pride–the

British fleet–from the Welsh coal driven engines into diesel oil ones.

In the same year the USA Supreme Court (Sherman Antitrust Act) decreed the

partition of the Standard Oil and as a result it stopped being a monopoly. But in 1907

there was a new power–the joint Royal Dutch and Shell. In the USA, California

produced the most oil, but in 1901 Texas became a leader (Beaumont, Spindletop).

In 1901 Texas State refused to accept the merger of Texaco and Gulf Oil. At the

beginning of 1906, over half of the oil produced in the USA came from Oklahoma. It

was also produced in Ohio, Kansas and New Mexico.

In the USA in 1912, there were 902,000 cars, in 1914–already 1.8 million.

Roads were constructed and the demand for petrol was growing. In 1913 a process of

thermal cracking (in UOP’s history it was 1914 and the famous Dubbs’ process) was

implemented into refineries for the first time which considerably increased the quantity

of produced petrol, improved its octane number and for 30 years it was the most

desired process, the first process of conversion. This technology was sold to the refinery

in Bratislava, to Romania, to Polish refineries, and then even to the USSR.

The Baku industry was destroyed by the revolution of 1905. Shell and Exxon

bought the oil fields from the Rothschilds and Nobels. In 1911 it became obvious that

it was “upstream,” not “downstream” that brought the most profit, wealth and power.

In the beginning of the 20 th century, Romanian oil was under control of Shell,

Standard Oil, the Nobels and the Rothschilds as well as the Deutsche Bank. The

Deutsche Bank used to sell Romanian oil to England through their company, British

Petroleum, which together with the name was later taken over by today’s BP.

Oil was discovered in the Middle East in 1901 when an Englishman D’Arcy got

an exploration licence. In 1908 Persian oil was produced by Anglo-Persian (today

BP). In 1912 a large refinery was built in Abadan. The same year a great figure,

Talleyrand of oil, Gulbenkian, an Armenian, the architect of the oil policy in this

region of the world and the founder of Turkish Petroleum, entered the history of oil.

The region was under the Ottoman Empire reign.

In 1910 a large amount of oil was found in Mexico (Tampico). There was also

exploration in Venezuela.

Oil and its role in World War I

Soon oil was to turn out to be something exceptional. WW I was a war of people

and machines driven by fuels coming from oil. Airplanes in the air, which for the first

time were used by the Italians in 1911-912 in the battle of Tripolis against Turkey,

horrendous German U-boots at seas, tanks (which someone described as the victory

of a lorry over puffer train) on the ground–all these machines were used to kill and

destroy. But the chronicles also cited positive events when e.g. 3000 Paris taxis

transported men to the Marna battlefield. In 1914 Churchill decided, and the

Parliament passed the decision, to purchase 51% of the shares of Anglo-Persian (now

BP). As much as 67% of the oil was coming from the USA, which made up 80% of

the allies’ demand. U-boots destroyed sea transportation causing fuel shortages. The

Germans used 70 of the refineries in Romania. Germany tried and managed to occupy

Baku which was defended by England from Persia. In 1917 the British army, to

protect the Abadan refinery, conquered then Turkish Baghdad and Basra. In 1918

the Turks captured Baku.

When war broke out the Austrian authorities in Galicia, recognising the

importance of the oil industry for the war needs, released workers from war duties for

this industry. But in the meantime, war destroyed almost everything–Gorlice almost

stopped to exist, in Borysaw and Tustanowice the Russians burnt down gigantic

tanks and 170 oil wells. The oil industry workers came forward to the Polish Legions–

the first army formations in reborn Poland.

43


Bitków (Poland’s former border

land), a view of oil rigs in a forest;

a postcard printed by

Wydawnictwo Artystów

in Vienna and commissioned

by E. Schreier from Stanisawów

in 1924 (phototypography).

All those facts showed the meaning of oil. The famous allies’ conference of

November 11, 1918 (Versailles Treaty), recognised oil as the blood of war and victory,

also foreseeing its great role in times of peace; the well-known Lord Curzon was

gloryfing oil too. That date is memorable for many European nations. It is also the

day of Poland’s independence. One might say that it happened thanks to oil. But we

may add that surely it took place thanks to the Polish soldiers’ blood offering...

II. THE TWENTIES, THE THIRTIES...

The Second Polish Republic

War destruction of 1914-1918 and later fights during 1918-1920 against Ukraine

and later against the Soviet Russia strengthened the Republic. At that time, many oil

men fought and fell (for example Wiktor Kulczycki who got a medal). However,

already in the first year after the war the production reached 830,000 tons. Later it

went down to 812,000 tons in 1925, 663,000 in 1930 and 553,000 in 1938. In 1919

Poland had 28 oil fields in very dissipated structure. The Polish government, under

the pressure of oil lobby–as we would say today–did not take advantage of the right

to take over the property of the Central States’ citizens under clear statements of the

Versaille Treaty. As a result the unheard-of wealth of the Austrian and German

companies was taken over by suppositious French and other capital while 75% of the

oil industry was in the hands of foreign capital, mainly of the French and the American

one. In 1919 the Pastwowy Instytut Geologiczny [State Geological Institute] and

Urzd Naftowy [Oil Authority] were founded. Konstanty Towiski (1876-1961), a

prisoner and exile of Czarism, then a great figure of those times, after exploration

made in Sumatra and Europe began to work in Borysaw and became a geological

adviser to Polmin. He was an author of maps, publications and editor of many texts

on oil mining and from 1938 a member of Polska Akademia Umiejtnoci [The Polish

Academy of Skills]. He continued his career after WW II becoming a full professor

and laureate of the state prize for prominent achievements in his field.

From 1929 to 1930, oil drillings were conducted in almost 200 localities with a

total of 100,000 m. every year. This meterage went down to 60,000 m. in the period

of the Great World Crisis. In 1936, again, there was a visible growth from about

100,000 m. to over 150,000 in 1938. In 1929 in the region of Jaso, 118 wells were

drilled and 29 wells were in working order. In Stanisawów province 34 wells were

drilled and production was obtained from 30. In 1931 fewer wells were drilled but in

the Jaso region out of 58 wells only 7 were negative. Much success was achieved on

old deposits. Gas was discovered in Roztoki. Oil was discovered in Tyrawa Solna in

1930. The year 1932 brought production from 10 new wells in the Stanisawów

province. There were few unsuccessful drillings. Similar results and discoveries in the

old fields were also predominant in later years. Gas was also discovered in Strachocin

and Szalowa. In 1936 oil was discovered in Lipie and Czarna near Ustrzyki, also in

Mranica, in Leszcowate, Humniska, Zae, wierchowa. Other discoveries include

Rzepiennki (1930), Magdalena (1931), Sanok-Zabotka (1933), Bystre (1934), Dolina

(1935), Fellnerówka-Hanka (1936), Szalowa-Heddy (1939). Though the area of

exploitation was extended in Borysaw, Rypne, Niebyow and Bitkow the production

did not grow. Here is a list of explorating firms: Maopolska, Polmin-Pollon, Gazy

Ziemne [Natural Gases], Pionier, Gazolina, Schmer J., Galicja. The company Pionier SA

was founded in 1928 by strong oil firms, like Premier, Nafta, Karpaty, Fanto, Galicja,

Standard Nobel, Vacuum Oil Co. and Polmin. Polmin was selected as an exploring

company. As much as 85% of the wells were less than 600 metres deep and only

2.8% were deeper than 1200 metres. The record-breaking Orów 1 was 2274 m. deep

(1934), drilled by Pionier but did not produce industrial output. A geophysical survey

was undertaken in 1929. About 10,000 km. 2 of the south east part of Poland was

surveyed by means of a magnetic method, about 17,000 km. 2 from the Vistula river

to Stanisawów was surveyed with a gravimetric method and over 12,000 km. 2 from

45


Bitków–general view, on the left

side there is an oil field office;

a postcard printed by E. Schreier

in Stanisawów in 1914

(phototypography).

Bitków–stone breaking plant

and oil rig No. 27; a postcard

printed by E. Schreier

in Stanisawów in 1914

(phototypography).

Tarnów to the Romanian border was examined with a seismic method. In 1923 a rope

drilling method was applied for the first time and since 1931 the Rotary system has

been used. In 1931 K. Towiski, at the geologists’ conference in Lvov, quoted data

on oil production in Poland in the period 1874-1928 (Table 3), which is interesting

because 1928 is the half-way-mark in 150 years of the Polish oil history.

The state of oil resources in the operational and potential oil wells was reported

to reach 774,242 cisterns on December 31, 1936 (1 cistern equals 10 tons). Here is a

list of oil fields in operating order in Poland by the end of 1938 (the age of oil wells in

parentheses): Lipinki-Wójtowa–Libusza–Kryg–Kobylanka–Dominikowice (72),

Gorlice (6), Biecz–Korczyna–Biecz (40), Ropica Polska–Siary–Skowa–Ropica Ruska–

Mcina Wielka–Harklowa (67), Sobniów–Roztoki–Jaszczew–Sdkowa–Dobrucowa–

Biakówka–Brzezówka–Mcinka (28), Potok–Turaszówka (47), Krosno–Krocienko

(49), Bóbrka–Równe–Rogi–Wietrzno–Kobylany–ki (89), Iwonicz–Klimków–

Lubatówka–Wulka–Posada (49), Ropianka, Zmiennica–Turze Pole–Górki–

Strachocina–Wola Komborska (41), Stara Wie–Brzozów, Humniska–Grabownica–

Lalin (41), Wglówka (49), Mokre (56), Witryów–Tyrawa Solna, Wakowa–

Ropienka–Paszowa–Stakowa (51), odyna, Rajskie, Lipie–Czarna. We should also

include here the whole area of Eastern Carpathians with Borysaw, Daszawa, Dolina,

Rypne, Schodnica, Bitkow, Nadworna and others.

The Polish oil industry in particular years is presented in Tables 4, 5 and 6.

The interest in natural gas significantly increased and not only in gas accompanying

oil production. Big gas resources were discovered in Daszawa, Sdkowa and Roztoki

(1922), Strachocin (1928), Balicz (1934), Wierzbowiec (1935), Chodnowice and Opary

(1938), as well as in other localities. Production reached the level of almost 0.5 billion

of cubic metres per year (such an amount is used nowadays by Pock refinery to produce

hydrogen!). The following pipelines were laid; in 1921: Winnica–Niegowice–Gorlice

and Krosno–Iwonicz; in 1922: Daszawa–Stryj–Drohobycz; in 1929: Stryj–Mikoajów–

Lvov; in 1933: Roztoki–Mocice and further to Niedomice, Strachocin–Sanok and

from Roztoki through Sandomierz, Sdziszów to Starachowice, i.e. to the Central

Industrial Region in 1937. The total length of high-pressure, long distance pipelines,

without branches, was about 800 km. Gas was used to heat not only refineries but

also three power stations: in Borysaw, Lvov and Mcin. Gas was used to produce

casing-head gasoline (light naphtha)–from 463 tons in 1919 to almost 40,000 tons

from 28 gasoline plants in 1938. Casing-head gasoline was valuable and dearer than

the oil product of 0.55 to 0.655 density, increasing the profitability of oil wells. Another

interesting thing is that LPG was produced through stabilization of gasoline which

was exclusively a Polish invention. The company Gazolina, belonging to M. Wieleyski

and W. Szaynok, developed many pioneer acomplishments; for example, they built

the first pipelines, compressor stations and gasoline units. Under I. Mocicki’s patent

they produced burners, reducers, fixtures and fittings. In 1932, using their liquid gas

called Gazol, they “gasified” Gdynia. In the oil concern Malopolska LPG was called

eteryna. The laboratory Metan belonging to Gazolina was later transformed into a

R&D Chemical Institute in Lvov. The today’s Instytut Chemii Przemysowej [Institute

of Industrial Chemistry] in Warsaw refers to that tradition.

In 1919 the Mining Academy was established in Cracow. Lvov Technical University,

engineering colleges, universities in Lvov, Cracow, Warsaw as well as foreign universities

delivered the best industry experts. Several engineers’, technicians’ or drillers’

associations came into being. Several professional superb works were published on

geological subjects and mining, by Zuber, Nowak, Towiski, Bielski and others. There

were professional periodicals like Metan (1919), Czasopismo Naftowe [Oil Periodical] (1920),

Nafta [Oil] (1922), Dwutygodnik Naftowy [Oil Biweekly] (1924), Przemys Naftowy [Oil

Industry] (1926), Geologia i Statystyka Naftowa [Geology and Oil Statistics] (1932),

Kopalnictwo Naftowe w Polsce [Oil Mining in Poland] (1934) and other numerous bulletins

of various institutes and unions. Many conferences and meetings were held.

47


Bitków–an oil rig and Sulimierski’s

workshop; a postcard printed

by E. Schreier in Stanisawów

in 1914 (phototypography).

Bitków–a postcard printed

by a book shop in Nadwórna

(owned by Aba Heller) in 1928,

a print in the brown colour

on the basis of a photography

by L. & M. Heller.

In homage to ukasiewicz’s tradition, his statues were built in many places.

A most honourable oil distinction was set up and called the Ignacy ukasiewicz Medal.

The following persons were honoured with this medal for their creative contribution

to the establishment of the oil industry: Wadysaw Dugosz (1863-1937), the Polish

president Prof. Ignacy Mocicki (1867-1946), a later prisoner of many concentration

camps, Prof. Zygmunt Saryusz-Bielski (1869-1942) and post mortem Prof. Stanisaw

Pilat (1881-1941).

It is just Stanisaw Pilat who after liberation in November 1918 became the

manager of the oil industry organization in Poland, being the director of the oilrefinery

department in Polska Komisja Likwidacyjna [The Polish Liquidation

Committee] which was taking over the remaining property after the Austro-Hungarian

monarchy. Inclusion of the Oil Authority in the Ministry of Industry and Trade made

him accept the position of a technical adviser at the Galician Carpathian Oil Company

and then the post of a technical director of Dbrowa concern. When Lvov Technical

University resumed its operation he was appointed lecturing professor of oil technology

and in 1924 he became the chairman of a newly set up chair of oil technology and

natural gas as well as of a small laboratory. In 1926 he interrupted his scholarly

activity and took a position in the company Polmin in Drohobycz, offered to him by

president Ignacy Mocicki and minister Edward Kwiatkowski. At his request, the

government founded Syndykat Przemysu Naftowego [Syndicate of Oil Industry],

including all Polish refineries in order to develop profitable solutions for the Polish oil

industry as well as the sale at home and abroad of oil and oil products. In 1928 Pilat

gave up chairing the Syndicate and in 1929 he left Polmin and came back to university.

In his script, published in 1928 according to his lectures at the Faculty of Chemistry,

we read: Petroleum is one of the most important mineral feedstocks of universal application in

the economic life of civilized countries. First of all, it is almost the sole source of propelling means

for combustion engines, which in the light of the present development of automobilism, air and sea

navigation makes it a product of the first need. Moreover, petroleum makes up the raw material

for the production of mineral lube oils and greases which condition the development of the machine

industry. Products received from oil also serve as fuels, as high calorific liquid fuel for illumination,

as grease and lube oil for all kinds of machines, and finally it serves various technical aims,

including healing and cosmetics. And one more quotation of Prof. Pilat dedicated to

managers of the oil industry and published in his monumental work Polska Odrodzona

1918-1928 [Poland Reborn 1918-1928]: How and with what kind of the cheapest means

can we obtain these products from petroleum which the army, railway, industry and everyday

life need more and more? The answer should be sought in laboratories run by factories, technical

universities, universities as well as in R&D departments of factories and oil refineries. The

world publicity, membership in international scientific associations, his R&D school

as well as extraordinary amount of, sometimes timeless, knowledge made Prof. Pilat

the patron of Instytut Technologii Nafty [The Institute of Oil Technology] in Cracow

whereas the chairs of oil at Lvov Technical University (today in Ukraine) as well as in

Gliwice and Wroclaw consider themselves as heirs and continuators of his great

achievements.

Obsolete Polish refineries required modernization 75% of the oil industry

belonged to the French and American big business. Production capacities of Polish

refineries were about 50% greater than the national supply. In the 1920’s, the

Americans constructed the first crude distillation unit (CDU), which was in fact a

column with an evaporation chamber and a cold reflux downwards. In Poland, the

first plant of this type was built in 1928 in the refinery Vacuum Oil Co. in Czechowice,

in 1932 in the Jaso refinery and in 1938 in Polmin. After WW II this technology

became present in all Polish refineries–the first largest CDU I and recently CDU III

being in Pock. Crude oil treatment–emulsion breaking takes place e.g. according

to prof. Pilat’s patent at the Jaso refinery. Dewaxing, acidic refinement and other

types of treatment were typical then. About 1935 (worldwide already in 1920’s)

49


Bitków–a postcard printed

by a book shop in Nadwórna

(owned by Aba Heller) in 1928,

a print in the brown colour

on the basis of a photography

by L. & M. Heller.

lead tetraethyl was added to petrol and this sufficed to increase the octane number.

Thermal cracking was already in operation in the 1930’s in Czechowice, then in

Drohobycz and in Gorlice. The refinery Polmin was the largest. It had long-distance

pipelines of gas and oil, 500 tank cars meeting one third of the national demand.

The next refineries after Polmin were Czechowice, Galicja in Drohobycz and the

refinery in Trzebinia. From 1929, the refinery in Jaso was out of operation. In

1938, there were 31 refineries in Poland but several of them were out of operation.

The number of Polish refineries and gasoline plants as well as their production is

shown in Table 7.

According to somewhat different data, there were 15 large refineries in Poland

during the inter war period. Their capacity varied from 10,000 to 200,000 tons per

year of oil processing–in total 850,000 tons and 64 small refineries of total capacity of

100,000. The processing capacities were developed from 950,000 to 1.2 mln t/y but

in 1938 only 42% was utilized. There were almost as many owners as refineries. One

of the largest refineries was concern Maopolska owned by Maopolska Grupa

Francuskich Towarzystw Naftowych, Przemysowych i Handlowych [Malopolska

Group of the French Oil, Industrial and Trade Companies] which after mergers

assembled Galicyjsko-Karpackie Naftowe Towarzystwo Akcyjne d. Bergheim i Mac

Garvey [Galician-Carpathian Oil Company, Bergheim and Mac Garvey], Dbrowa-

Premier, Fanto, Oil, Naftowy Przemys Maopolski [Malopolska Oil Industry], Petrolea,

Oleum and others. Maopolska owned 8 big refineries: two in Drohobycz, Dziedzice,

Gorlice, Jedlicze, Rychcice, Trzebinia, Ustrzyki Dolne as well as power stations in

Borysaw and Mcinka. The state-owned Polmin operated the largest refinery in

Drohobycz and it also managed state-owned gas pipelines in Jaso as well as

construction of the central gas pipeline in Sandomierz, a gasoline plant in Mocice

and numerous oil wells in Roztoki, Sobniowo, Lipinki, Równe, Daszawa and Borysaw

plus the majority of the country’s filling stations. The firm Gasolina had three refineries

in the Borysaw region. The following firms owned one refinery each: Galicia in Lvov,

Polska Nafta [Polish Oil] in Koomyja, Gazy Ziemne [Natural Gases] in Lvov, TEPEGE

in Targowiska near Iwonicz plus foreign concerns: Standard Nobel in Libusza, Vacuum

Oil, which also had a refinery in Czechowice as well as concern Potiq, with the refinery

in Jaso. Production, national consumption and export of oil products are shown in

Table 8.

There is an evolutionary change in products quality. Cymogen and Rhigolen are

names of C4-C5 mixtures; gasolines, i.e. light naphtha C6-C7 (gasolen, canadol with

density 0.64-0.667 and boiling range 70-80 deg. C), were also called petroleum ether

(also keroselen, rhygolen, Sheerwood Oil of 0.65-0.66 density and boiling range 40-

70 deg. C), there are also solvent naphthas (naphtha C–safety oil, Dafourth Oil–of

specific weight 0.667-0.707, boiling range 80-100 deg. C; naphtha B–ligroin–of

density 0.707-0.720 and boiling range 80-120 deg. C; naphthal A of density 0.722-

0.737 and boiling range 120-150 deg. C). In 1927 standardization was introduced.

The following petrols are distinguished: gasolline, aircraft fuel, car fuel, agricultural,

extraction and lacquer naphtha. Kerosene was still produced (kerosen, kerosin,

petroleum–boiling in 150-300 deg. C). So much gas oils (in 1927 this oil was still

called propelling oil) were needed during WW I that the production was not sufficient

and solar oil (medium oil for lamps and engines, heavier than today’s gas oils, of flash

point 80 deg. C and density 0.875-0.885) disappeared as an applied product. In

1937, there were gas oils on sale but–judging by their specification–they were very

heavy: oil I of density 0.94 and 50% of distillation to 350 deg. C; oil II–density to

1.02 and 20% of distillation to 350 deg. C. Lubrication oils are the oldest. In Poland

in 1915-1925, there was considerable development; in 1927 there were 15 groups of

such oils, in 1927-1937 there was a next jump: viscosity and temperature properties

were improved. Additives–detergents–entered the Polish market very slowly and with

delay. Fuel oils were not produced before WW II. In 1900 the world production of

51


Gorlice–a general view

and an oil rig; a postcard of

1898 of an unknown author

and mailed in 1899

(bicoloured phototypography).

Ropica Ruska near Gorlice;

a postcard of 1898 of

an unknown author and mailed

in 1899 (phototypography).

bitumens reached only 26,000 tons, more than 50% in the USA. In 1925 Poland

produced 34,000 tons of bitumens at 715,000 tons of oil processing.

In the Austrian section of partitioned Poland the oil products trade was

monopolized by French and Austrian big business plus some American companies.

Automobilism starts to develop in the beginning of the 20 th century but in Poland

that development really happens after WW I. After 1918, we lost the Russian market

but in the former German and Russian section we also got rid of the American and

Russian competition. Transportation, storing and distribution of oil products were

conducted by many firms, for example by Petrolea. Several large firms–Polmin,

Karpaty, Galicja, Standard-Nobel, Gazolina or Gazy Ziemne–owned filling stations.

Since the turn of the centuries, this kind of fuel retail sale has already been known.

On December 31, 1938, there were 55,000 motor vehicles registered (motorcycles,

passenger cars, lorries and buses). In 1937 Poland had 8 cars per 10 thousand citizens,

Romania–12, Austria–69, Czechoslovakia–71, Italy–95, Germany–214, Switzerland–

222, Belgium–242, England–476, France–517. And now let us look at the currrent

data–what a progress! Poland–270, EU–on the average 500, USA–600 cars, but no

longer per 10,000 citizens but per 1000!

In 1928, managements of the seven world-scale concerns divided the whole

world into spheres of influence, establishing the cartel well-known as Seven Sisters

(Standard Oil of New Jersey, Royal Dutch Shell, Gulf Oil Company, Texaco,

Socony Mobil, Standard Oil of California, British Petroleum Company). Three of

those “sisters” came from Standard Oil which was divided in 1911 by the US Supreme

Court decree. In the beginning of the 21 st century, we have such giants as Exxon

Mobil, Chevron Texaco formed from Gulf, Standard Oil of California and Texaco,

Shell and BP remaining as they were. All these giants knew and know very well that

it is the upstream which gives the biggest money. Of course, it requires big investments

and taking risk in exploration and drilling. Refineries are also unusually expensive to

built. The access to the market, also expensive in the building of the infrastructure,

makes it possible to get the biggest profit. Possession of all structural constituents–so

called vertical integration–gives the full control. During the interwar period, in Poland

there was a company, Standard Oil of New Jersey, which sold the most oil products

on the market in 1921. Polnobel, a company owned by the brothers of the famous

Alfred Nobel, was affiliated to Standard Oil in 1925. Then there is Socony–Standard

Oil Company of New York, which in 1931 took over Vacuum Oil (from 1959 it was

Mobil Oil and since 1998 it has been Exxon Mobil). At that time, the only state

refinery in Poland was Polmin. Oil products were exported through Gdansk but we

had to build customs depots there because the international committee did not grant

us those which were left by the Germans. There were storing capacities of 100,000

tons–much more than an annual export from Poland. Shell, though it had a base

there too, withdrew from our market. Small national demands made export in the

1920’s quite considerable. Later it dropped to a dozen or so thousand tons per year.

Prices were fixed and there were export quotas because the production capacities

of the refineries were much bigger than the national demand. Table 9 presents export

of petrol along with light naphtha [gazolina] plus wax. The domestic consumption of

petrol and kerosene was very small; Table 10 presents the national average annual

output, export and import in 1933-1937.

World’s vivid development after the horrors of World War I

After this war, the US economy became much stronger–in 1920 there were 9.2

mln cars there, in 1929–already 23.1 mln That made up 78% of cars all over the

world, one car per 5 persons, as in our country 70 years later! (respectively in Great

Britain there was one car per 30 persons, in France–per 33, in Germany–per 102, in

Japan–per 702, in the USSR–per 6130 persons!). Cars covered about 12,000 kilometres

per annum. The quality of petrol sold in shops was often bad. Therefore refineries

53


Kobylanka and Jedle near Gorlice;

multipicture postcard of an

unknown author, mailed in 1902

(coloured phototypography).

Lvov–a mail card of

Galicyjsko-Karpackie Towarzystwo

Naftowe (formerly

Bergheim & Mac Garvey),

mailed in 1933.

implemented the petrol quality control through ownership of petrol stations and the

sale of their brand products. Leasing of gas stations was already well-known during

World War I. In 1919, gas stations and garages sold 85% of the petrol. In 1921,

there were 12,000 stations, in 1927 there were 317,000 points of sale–these were

small shops or garages. The expansion of petrol stations took place in the period

1920-1939. Shell, for example, used to construct gas stations in 6 weeks and there

were 10 days for the start up–that was quicker than it took to arrange formalities

connected with the land lease. In 1929 there were 116,000 gas stations, in 1939–as

many as 231,000! Many of them distributed free road maps (as it happens today),

they employed mechanics and provided garage services. Refineries started to produce

petrols of higher octane number. Since 1921, we have known lead tetraethyl which

became blended with petrols two years later (in Poland from 1935). The automobile

revolution became a fact, for instance by the end of the 20 th century in our country.

New discoveries of big oil

As early as in the 1920’s, there were fears that crude oil would soon run out. In

1918, for example, oil wells were 1800 metres deep whereas in 1930 they reached

3000 m. Reality quickly surprised pessimists. California, which in 1910 produced

22% of the world oil output, experienced new discoveries: in 1921, Shell found oil

and in 1923 a quarter of the world’s oil production and the majority of it was in the

USA. In 1921 Mexico became the second country in the world with regard to oil

production–in 1925 this country produced 160 mln tons. But the uprising of 1911

and the infamous constitution of 1917 forecast problems for foreign firms which led

to the deterioration of public and business relations, the drop of oil production by

80% in 1927 and, finally, to the nationalization of the oil industry in 1938 by president

Cardenas and the establishment of the firm Pemex (Petroleos Mexicanos) which even

caused embargo on part of England. In 1920, the large refineries Aruba, Curacao of

Amoco and Shell, were founded. In 1929, Venezuela became second after the USA in

oil production. In 1922 this country passed a new oil law, contrary to Mexico. In the

1920’s Venezuela entered the period of a great boom–55% of its oil production was

exported to the USA but after the world crisis it had to look for new markets in

Europe.

After World War I, the victorious powers executed a new division of interest

zones in Turkish Petroleum–France replaced the Deutsche Bank, however it did not

get Mosul which was still occupied by Great Britain. In 1924, they established the

state company CFP (Compagnie Francais des Petroles–the ancestor of today’s Total,

which was set up by Fina and Elf together). CFP groups 90 banks and firms. France

had access to the oil fields in the Middle East and in 1928 it passed a new oil law–

controllable prices which protected the market. In 1925, under the pressure of the

USA, also American oil companies gained access to the Middle East oil fields. Oil in

Saudi Arabia (this name has been in force since 1932 with the coming of the Sauds

dynasty) was discovered in 1924; Socal (today’s Chevron) was there from 1922 and it

discovered oil and constructed a refinery on Bahrain island in 1932. But, according to

BP, geologists it is Albania, not Saudi Arabia and its territory, which has splendid

prospects to discover big oil. In 1927 BP discovered the oil fields in Kirkuk and set

up the company IPC (Iraq Petroleum Co.) in Mesopotamia (since 1925 this region

has been named Iraq). It is present in Anglo-Iranian (in 1935 Persia was renamed as

Iran). Soon the Persian Gulf, treasures of which have been so far caught by the pearldivers

only, was to become famous for its oil. There was big oil in Damman–the city

of Dhahran was founded and in 1939 the harbour, pipeline and refinery of Ras Tanura

were built. In 1938 Gulf Oil–a company owned by the Mellons family–discovered

the giant oil field Burgan in Kuwait. But oil from the “golden crescent” region from

Iran to Arabia was not for all–Italy, Japan and Germany did not get a licence there.

Italy had their own national concern Agip (Azienda Generali Italiana Petroli), which

55


Dziedzice–a view of Schodnica

oil refinery; a postcard printed

by Karol Schwidernoch in Vienna

and mailed in 1898

(coloured phototypography).

Dziedzice–Schodnica refinery;

a postcard of 1915 printed by

“B.I.M.” printing house.

in the 1930’s shared Italy’s market equally with Shell and Esso (Exxon). In 1934

Japan introduced the market adjustment law–Exxon, Shell and Mobil had 60% of

the Japanese market. In 1913 Germany had Bergius’s process to produce fuel from

coal (in 1931 the Nobel Prize for Bergius and Bosch) as well as the Fischer-Tropsch

process 10 years later and the first plant in 1927 (Bergius’ petrol was better). In 1926

Exxon became a partner and in 1929 it erected a new unit in Louisiana. Due to

Hitler’s program from 1932, on September 1, 1939, Germany had 14 factories and

other 6 were still being built. Apart from that, there was 18,000 m. 3 of synthetic

petrol per day which makes twice more petrol than we produce now at the Pock

refinery! In 1927 the Soviet NEP (Nowaja Ekonomiczeskaja Politika–New Economic

Policy) got rid of the foreign firms in Baku. In 1937, small Bolivia confiscated the

branch of Standard Oil. In 1923, the Prime Minister Churchill wanted to merge BP

and Shell but soon gave up that intention. Regardless of that fact, oil companies were

already very strong–in 1924, at a secret conference and with the participation of the

British government, they executed the final division of the spheres of interest and

concluded an agreement called As Is (market sharing, production quotas, prices) for

which even after 30 years they were sued though without consequences. Thus we

witnessed geopolitics which till the present day animates the activities of great powers.

Paradoxically–the liquidation of Standard Oil strengthened that industry. Oil is now

a strategic challenge because, afterwards, it shaped the whole 20 th century.

The great world crisis slowed down the world economy. Thermal cracking doubled

the production of petrol and suddenly there was too much oil! There began a fight for

a customer–a New Deal–initiated by president Franklin Roosevelt in the 1930’s,

which brought quota system and market adjustments. As in a mirror, all that is bad

in life was reflected in the oil industry. Nationalism is an example of such a phenomenon.

Therefore, sometimes in crisis, alcohol is added to petrol.

The world was full of tensions and strong nationalisms led to wars. In 1935 Italy

was threatened with an embargo by the world community for its invasion on Ethiopia.

Japan had also been fighting for Lebensraum since 1931 (Manchuria, 1937–war against

China); the USA did not react though it made Japan economically dependent.

A lot of new technologies–for World War II?

Ideas for rent–this is the title of the history of the UOP company (Universal Oil

Products). This enterprise not only created history but during its functioning was not

free from mistakes. UOP, with much effort, developed completely new techniques in

oil processing. Experience prompts that in order to work out a new process one should

solve at least 60-100 different problems, often coming from distant scientific branches

in order to apply these new solutions in practice. The company has been existing

since 1914 and has developed the famous process of thermal cracking as well as

employed, among others, a prominent practicing scientist–Gustav Egloff, the son of

an emigrant and probably the most important person of the period. But probably the

best period in UOP’s existence began after 1930, when a world conference grouping

4500 persons of science and practice from 50 countries was held in the German

Reichstag. Experts foretold that the US oil deposits would run out within 20 years

because such a lot of petrol was needed. They saw the solution in catalysis process

which was to resolve the problem of the expected lack of petrol. Coal was to be a

solution and rescue–IG (Industriegemeinschaft) Farben and Standard Oil of New

Jersey (Exxon) were to become leaders. But it was not these companies which were to

become healers of the more and more fuel-consuming economy. Ipatieff (original

English spelling), already then a famous chemist, in czarist Russia was responsible for

explosives and for gas-masks against war gases during WW I. It is in his brother’s

house in Jekaterynburg that the whole czarist family of the Romanov dynasty were

brutally murdered by Lenin’s order. Ipatieff, being a czarist general but also a famous

chemist, was saved, also by Lenin’s order, and become a member of the presidium of

57


Limanowa–a railway station with

tank cars servicing

a refinery in Sowliny;

a postcard from 1917 printed by

M. Olszewski in Limanowa

(phototypography).

Oil refinery in Sowliny near

Limanowa; a postcard printed

by M. Olszewski in Limanowa

in 1916 (phototypography).

the Highest Council as a manager of the administration of chemical industry with a

task to build modern chemistry. Being the only non-communist in this government,

he took to work with enthusiasm because, as he said, governments come and go whereas

people stay. Working as the ambassador of sciences at the Academy of Sciences, he used

to go abroad freely–18 times he was a consultant of Bayerische Stickstoffwerke. Stalin’s

repressions reached several of his students and co-workers–he also became a suspect,

so, reasonably, did not come back to the USSR from the above mentioned congress.

And thus he found himself in UOP. That company also employed Hans Tropsch and

a Russian emigrant Vladimir Haensel. In UOP, a Polish emigrant Herman Pines

accidentally discovered the reaction of alkylation. These great scientists, through their

research, contributed to the creative progress in the history of oil. Ipatieff and Pines

devoted themselves to pure chemistry. Isomerisation was their work, but at that time

it was an unwanted process because isobutane is very volatile–but in the course of

time it turned out very important. The polymerisation unit, which was completed in

1934, yielded petrol with the octane number 81, i.e. racing gasoline. Dubbs’ process

cracks hydrocarbons molecules, whereas this process “glues” them. In 1937 Sun Oil

built the first catalytic cracking with “magic clay” by project of the French engineer

Eugene J. Houdry. In 1937 Time named Vladimir Ipatieff the greatest expert of catalysis

reaction in oil refining. After his refusal to return to the USSR (his disciple, ambassador

Trojanowski, persuaded him to do so), Ipatieff’s son, also professor of chemistry,

renounced his father in 1936 and the Soviet Academy of Sciences crossed out Ipatieff

from its membership.

In 1936 in the USA, there were 28 mln cars and for the first time they used more

cracking petrol than straight-run one, thanks to the progress of techniques.

Polymerisation was the only catalytic process in refineries. UOP worked out a synthetic

catalyst for cracking in the solid bed–it was the continuation of Tropsch’s research.

Standard Oil’s successors developed a fluidal cracking process and they established a

consortium to deal with the cracking process, consisting of Standard Oil, BP, Shell

and UOP. The civil war in Spain showed the important role of aviation for which

high-octane petrol became vital–it improved the compression ratio, speed, lifting

capacity and load capacity. Thanks to polymerisation, isooctene and isooctane of 100

octane number was produced. It was produced by Shell–then one of UOP’s owners–

for the engine of 260 mph. In 1937, UOP included that process in its offer. Also Shell

instituted the alkylation process by Ipatieff, recognized by UOP as a useless one in

practice. It was also Shell which began to produce isobutane from butane, modifying

Ipatieff’s isomerisation catalyst. It meant more feed for alkylation. No one other than

Ipatieff contributed more to the production of high octane petrol–said the President of the

American Chemical Society in 1937. Recapitulating, it was UOP’s R&D work which

developed feed materials to produce explosives, rubber and detergents–here especially

Pines’ work. It is also worth remembering about Ker rubber from Dbica (Poland),

which was handed over to UCC (Union Carbide Corp.) during WW II as well as abou

the Pole Szuszkiewicz’s contribution. UOP sold its licences for 500 units with the

total output of 32 mln tons per year under Dubbs’ licence as well as for polymerisation

units. In 1937 the licence on polymerisation reached Saratov, Ufa and Groznyj in the

USSR, in 1938–Japan (they terminated that contract!); Department of State’s

acceptance was always granted. The allied forces lost access to 95% of natural rubber

after Japan’s attack on Pearl Harbour on December 7, 1941. In 1940 Dow Chemical

produced butadiene on the basis of UOP’s licence. UOP also developed a patent on

the production of toluene from n-heptane, necessary to manufacture TNT

(trinitrotoluene). During WW I 68,000 tons of coal were used to derive TNT. WW II

needed as much as 1.35 mln tons of TNT–this time it was produced from oil processing.

Fischer-Tropsch petrol attained 87-91 octane number. The allied forces administered

petrol with an octane number even up to 100. During WW II the Americans needed

14 times more petrol daily than they sent to Europe during WW I! Just after the

59


Glinik Mariampolski near

Gorlice–oil refinery

of Galicyjsko-Karpackie

Towarzystwo Naftowe (formerly

Bergheim & Mac Garvey);

a postcard printed in 1900

by Aleksander Lecker in Gorlice

and mailed in 1906

(coloured phototypography).

An oil refinery in Glinik

Mariampolski near Gorlice;

a postcard printed by

S. Engelberg in 1910

(coloured print).

attack on Pearl Harbour the authorities ordered to make available the patents of

alkylation with sulphur acid, cracking and reforming (Hydroforming ® ). Standard Oil’s

Hydroforming ® was developed on the basis of the German patent from before the

war. It did not crack, however, like the thermal reforming (they knew this process

from the 1920’s), but it provided necessary octanes and TNT precursor which played

such a role during WW II. Following the exchange of patents, UOP knew that process

and studied it very hard. Costs and economics, however, were very important to

justify its implementation. At that time, UOP used alkylation (with sulphur acid) on

Trinidad. Hydrofluoric acid (HF) had already been discovered for that application (it

was terribly dangerous to handle). In 1942 the Petroleum Administration of War

undertook an action Quick 100-Octane. About 400 refineries of 20 mln tons per year

participated in it. Chemists were very much interested in triptan–2,2,3-trimethylbutane,

i.e. hydrocarbon of the highest then known octane number. They

could produce it but there was no engine to use it. On August 1, 1943 a very important

and tragic operation took place in which 178 alkylate-driven bombers took off from

Libya to bomb Ploiesti which produced one-third of the Nazis fuels. One fourth of

the 1733 men did not come back and only 33 airplanes were still able to fly. But

fortunately, they managed to destroy the fuel centre. Since 1942, the war had used

200 mln tons of oil products, including 5 mln tons of aviation petrol. Ipatieff, the

great Russian chemist like omonosov and Mendeleyev about whom we learn at

school, died in 1952, in his 85 th year of life. But, according to the president of the

American Chemical Society, it is he who had a much bigger influence on chemistry

and prosperity than the two others. In 1965 the USSR Academy of Sciences

rehabilitated him. Egloff died in 1955. In 1959 Dubbs, Egloff and Ipatieff were

commemorated in the Refining Hall of Fame in Titusville.

In 1940 Japan attacked the French Indo-China (Vichy’s government did not

oppose it) but in 1941 the USA froze Japanese assets. It worked as an embargo

because that country was not able to pay. In 1943 Japan had access to 25 mln tons of

oil per annum from the Dutch India which it was occupying, though in 1942 the

refinery on Borneo was destroyed to avoid its being taken over by the Japanese.

However Caltex (ChevronTexaco) discovered oil Minas on Sumatra in 1941. The US

submarines destroyed sea transportations so successfully that due to the lack of oil,

alcohol and vegetable oils were added to fuels in 1944. Yet as late as in the 1950’s, oil

made up only 7% of the energy source in Japan, i.e. less than wood! We all know

what was the outcome of the war with Japan.

Poland experienced so many disasters that they would suffice for many

generations. The Poles’ fate, for centuries, meant tragedies of repeated fights, uprisings

and wars for freedom resulting in deceases and destruction. Also men-of-oil were part

of that history. Again, it is difficult to enumerate those who may have been forgotten.

It is worth providing some examples of heroic and patriotic behaviour. For example,

Jozef Ostoja Ostaszewski, later an assistant professor of the Oil Institute, fought in

the war of 1939. Several confined scientists managed to escape internment and escaped

to the West. Among them was engineer Kazimierz Kachlik. Here are several members

of the underground resistance movement: Ryszard Wolwowicz, Jacek Soyski and

Józef Pietrusza. Over one thousand of oil workers lost their lives in WW II, for example,

Wodzimierz odziski, son of Felicjan, as well as Professor Stanisaw Pilat who was

shot dead by a German firing squad in Lvov at Wuleckie Heights.

Thus, oil and the history of wars intermingle. Oil, as ill-omened and destructive

as the A-bomb, became a weapon in the fights for domination. Petrols which were

used in WW II had octane numbers 75 and 87. The Germans used synthetic petrols

in 46% but in 1943 that number increased to 57%. German tanks were petroldriven

in comparison to gas oil-driven Soviet tanks. The lack of petrol held back

Rommel in Africa but also Patton in Europe. Allied forces used petrol with an octane

number of 100. The merits of such fuel (at octane number 100 an engine power is

61


An oil refinery in Glinik

Mariampolski near Gorlice;

a postcard printed

by S. Engelberg in 1910

(coloured print).

An oil refinery in Glinik

Mariampolski near Gorlice;

a postcard printed in 1910

by Mutual Help Teachers’

Association in Gorlice,

printed by L. Weis in Budapest.

increased by about 15-30%) helped them to gain advantage in the war. It is a cliché

that possession of oil means to have power. Then, citing the most famous oil-man in

history, Rockefeller, commonly perceived as the embodiment of wealth and malice

but later a well-known philantropist, who said, It brought more good than evil to the

world, one might wonder whether it is true.

III. THE WORLD AFTER WORLD WAR II

After WW II rapid development again

WW I and WW II proved that oil is the “blood of war” and that oil equals

power. President Roosevelt was to understand the importance of the Arab oil much

later–even the Italian air-raids on the refinery at Ras Tanura in 1941 did not suffice to

alter it. However, it is he who through his diplomacy handed over Iran to Great

Britain, he who recognised Iraq and Kuwait as common authority zones and assigned

Saudi Arabia to the American firms. Northern Iran stayed in the Soviet hands till

1947. In Saudi Arabia the Aramco company was founded in 1944. A third of its

assets were possessed by the USA. After the proclamation of the state of Israel in

1948, Saudi Arabia, in 1950, was granted military guarantees from the USA.

How much the oil production grew, in relation to the data in Table 6 within just

several years! In 1945 the USA produced 235 mln tons, the USSR–204 mln tons,

Iran–180, Mexico–60 and Venezuela–44 mln tons. When WW II was over, some

journalist asked Gustaw Egloff on the phone, Is it the end of the refinery industry–do we

need it now? Hearing long explanations he said to a collegue sitting aside: OK., Gasoline

Gus (Egloff) is still talking. Although in the period 1940-1949 a number of filling

stations went down in the USA but after 1946, the country had undergone a boom:

it produced over 2 mln cars and in 1947 already 3.5 mln In 1950 in the USA there

were 50.3 mln personal vehicles (other data claim 45 mln in 1948), the world along

with the USA had 53 mln personal cars. However, within the period 1947-1948 the

USA had bigger oil import than export. In 1956 the American authorities elaborated

a program to build 60,000 kilometres of highways–thus the railway lost the market.

In 1940 cracking units processed about 2 mln tons per annum and 25 mln five years

later. The first UOP’s fluid catalytic cracking was started up in 1947 and several

years later there were 50 such units. In 1947, there was one of the most tragic

catastrophes in the US history. In Texas City fires and explosions spread starting from

ammonium nitrate through the ammunition warehouse to the refinery like a small

atomic bomb. It cost the lives of many people.

Poland after WW II

Poland, after WW II, only apparently was a victorious country–it was horribly

devastated with incredible material, human and territorial losses.

The oil-bearing areas were reduced to Carpathian Przedgórze [mountain foothills],

despite that in 1945 oil production reached 86,000 tons (other source reported

106,000)–an admirable accomplishment having considered both invaders’ robbery

during the war. During the 1950’s, oil production rose to 189,000 and to 195,000 in

the 1960’s. There was a need to enter new territories for exploration. In 1946, the

first drillings took place in Kujawy province and salt was discovered in Kodawa and

Inowrocaw. Aleksandrów Kujawski was a site of search. These works were stopped

in 1950. In 1955 oil exploration was resumed in Ni Polski [Polish Lowland] and in

Ostrzeszów. In 1956 a branch office of Polskie Górnictwo Naftowe i Gazownictwo

(PGNiG) [Polish Oil and Gas Exploration Company] was founded in Pia and

afterwards in Zielona Góra and in Toru. The Polish Lowland provided oil from fifteen

deposits, the first oil well being built in 1961 in Rybaki near Krosno Odrzaskie; in

1961-1965 production reached 75,700 tons. The best result was in 1974, when it

reached 562,000 tons. There is the Grobla oil field in the Carpathian region and

Kamie Pomorski at Ni Polski. The largest gas production–7.5 bln cubic metres–

63


Oil refinery in Trzebinia;

a postcard of 1910 signed

“B.K.Sch.”; a colouful print.

Borek–oil refinery Jedlicze (built

on fields of Borek village);

unknown author;

a postcard mailed in 1904

(phototypography).

was in 1978 and the best period of 1976-1980 oil production reached 917,000 tons.

The Polish Lowland was rich in gas–its supplies, up till 1987, reached 110 bln cubic

metres from sixty deposits with production starting in the 1970’s with the annual

output of 3.3 billion cubic metres. The 1980’s witnessed a fall in production.

The demolished Polish refineries were rebuilt mainly thanks to the initiative of

the local population and sometimes in defiance of the authorities’ opinion. After

WW II, oil processing took place only at the Jedlicze refinery. On August 7, 1944,

the Americans almost completely bombed the Trzebinia Refinery and many people

were killed. Rebuilding took place in the period 1952-1953–then it was the largest

refinery in Poland. It produced, among others, naphthene acids, technical fats and

later it utilised old tyres. Till 1960, Trzebinia produced 100,000 tons of bitumens

per annum. The refinery in Czechowice, which was also bombed by the Americans

(August 20, 1944), was rebuilt comparatively late, then it was revamped. The Polish

south refineries were modernized. The world refineries applied new technologies

already in the 1940’s. Electrodehydrators for oil cleaning before distillation were

introduced after the war–in Czechowice and Trzebinia under the Russian licence.

The selective furfural refining process was introduced in the Jedlicze and Czechowice

refineries. Deasphaltisation with propane was applied in the Jedlicze refinery. They

produced petroleum jelly, greases and waxes. Bitumen blowing, which was wellknown

already before WW II, was used in all refineries. The Jaso refinery

manufactured carbon black which is necessary for the production of tyres and additives

for lube oils. Oil processing in the Polish refineries is shown in Table 11. It could be

interesting to show data on employment in the oil industry in Poland just after the

war and later–Tables 12 and 13.

After the war, there was not enough crude oil for five existing refineries. The

West announced embargos and the USSR produced too little oil. The big oil

Romaszkino was discovered in 1958. Poland, being a country of coal, tended to

disregard the oil industry. Oil products were imported mainly from the USSR. The

Russians sold us Austrian oil–till they left Austria in 1955–as their war reparations.

In international trade we imported products from the East: exporting of surplus

goods to the West was necessary to get foreign currency. Table 14 represents import

and export of oil and petroleum products.

The world oil consumption gained enormous acceleration. In 1952, oil

processing reached 680 mln tons. After 1945, we can see the beginning of the

development of the petrochemical industry–about five hundred products were

produced in 7 mln tons is (about 1% of oil’s worth). Fifty years of automobilism

development had passed and the market needed high-octane number petrol due to

the fact that the compression ratio in engines rose from 5 to 9-10 to get better unit

power. During the war, the allied forces used 100 octane number aviation petrol

which gave them an advantage over German air forces which were still using

synthetic petrol of lower octane number and well-known since 1932. Lube oils with

additives work 5-7 times longer than fine mineral oils. In Poland after July 1 st ,

1958, petrol had MON (Motor Octane Number) from 55 to 80 and it contained

much lead tetraethyl–up to 1.4 g/kg. After July 15 th , 1966, leaded petrols 78 and

94 were in force (in this case the method is RON–Research Octane Number) and

they had up to 1.2 g/l of lead tetraethyl. After general electrification of the country,

kerosene almost vanished from the market but on the other hand there appeared

jet fuel. On the turn of the 60’s and 70’s, the refinery in Glinik started the production

of aviation fuel ATK under international standards. There were several kinds of

gas oil which were different in relation to the presently produced oil! At that time

world refineries applied other methods of refining (selective, hydrogen, i.e.

hydrofining or hydrodesulphurisation), there were destructive processes, reforming,

isomerisation and alkylation. All these chemical processes brought about progresses

which engine constructors were waiting for.

65


Jaso–an oil refinery in

Niegowice; a postcard printed

by Juliusz Krischer in Jaso

in 1906

(coloured phototypography).

Oil refinery in Jaso; a postcard

printed in Jaso in 1915

(phototypography).

The world and its new technologies

New refinery technologies were being developed very quickly which we have

come to know also from the Pock refinery. In 1947, Haensel developed a reforming

process with a platinum catalyst but the road to success was to be very long. He

discovered poisoning of the catalyst by sulphur compounds. He also discovered a positive

influence of chlorine and fluorine. The thermal reforming gave 70% of petrol efficiency

and an octane number over 70. The new process mentioned raised yield to 90% and

an octane number over 80. In 1947, Platforming ® process caused resistance even in

the sales department of UOP. It took over two years to implement the new technology

and in four months a desperate customer started to adopt a small unit and demonstrated

it to prejudiced and distrustful experts. The test was not started–liner had to be added.

The problem of precipitation of sulfide iron was solved by radial flow on the catalyst.

They got an octane number 93 at 95% efficiency! The following slogan was created,

they even apply platinum to get the best petrol. The end of 1949 brought ten licences. They

poisoned a catalyst with arsenic. Shell bought this process for its refineries. In the

Smithsonian Institution in Washington, they placed three models of UOP units:

thermal cracking, polymerization and Platforming ® . Together with Dow Chemical,

they developed a process of production called Udex ® . Aromatics turned out useful

during the Korean war. Antioxidants were elaborated–it was a remedy against the

harmful influence of the ozone upon tyres. In 1954 UOP along with Union Oil

developed a process of hydrodesulphurisation called Unifining ® , which opened the

road for processing of sour oils. At that time UOP offered fifteen processes!

World’s years of anxiety

Apart from many other elements, the Marshall plan, which was devoted to

European countries ruined by WW II, assumed deliveries of 20% demand for oil

during a severe winter of 1947, due to a general shortage of coal. That plan was an

incentive to give up coal. In 1946 Europe imported 77% of its oil from the West but

already in 1951 80% was imported from the Middle East.

Yet the 1950’s were not calm. In 1951 there was the nationalization of the Iranian

oil industry and the state founded NIOC (National Iranian Oil Co.). Great Britain

embargoed Iran for nationalization and shut down the Abadan refinery. In 1950 as

much as 40% of the aviation petrol was sent to the Korean war just from Abadan,

then the largest refinery in the world. In 1952 the Iranian oil production immediately

fell to 1 mln tons per annum whereas the world needed 650 mln tons per annum.

British and American companies as well as the French CFP resumed their activities

They received compensations. In 1957 ENI (Ente Nazionale Idrocarburi) entered the

Iranian market offering better conditions. It was its president, Enrico Mattei, who

opposed the hegemony of the “7 sisters” (that is how he called the leading world’s oil

concerns). He owned the newspaper Il Giorno, maintained politicians from the Christian

Democracy and violated the principle of 50:50 from Venezuela and other countries.

ENI was established in 1953. The great Enrico Mattei avoided British mediation in

the oil purchase and traded with Iran and Russia. He died in 1962. His concern took

up the national Agip and expanded thanks to the discovery of gas. ENI and its SNAM

Progetti (Societa Nazionale Ante Metanopoli–Projects) played a huge role in the

building of the Polish refinery industry here in Pock as well as in Gdask. Then

Amoco discovered oil near the now famous terminal on the island of Kharg. The wars

of Israel with its neighbours started with the war with Egypt in 1956. The same year

president Nasser nationalized the Suez Canal. English Prime Minister Disraeli had

bought 44% of that Canal with Rothschild’s money in 1875. Almost two thirds of

the oil sailed through the Canal to Europe but after India’s regaining independence

the Channel did not matter so much for the British. The USA refused to fund the

Aswan dam but in 1959 the USSR provided funds for that project.

67


Jaso–a railway bridge on Wisoka

river (in the background you see a

refinery); printed by Koo

Towarzystwa Szkoy Ludowej

in Jaso and mailed in 1914

(phototypography).

Niegowice (Jaso)–oil destillery;

printed in 1900 by J. Zajczkowski

in Jaso (phototypography).

Jean Paul Getty, a well-off townsman, in 1953 discovered oil in Arabia. Getty’s

company was later purchased by Texaco for the huge sum of 10.2 billion dollars.

Iraq, which operated an export pipeline to Haifa (built in the period of the British

Mandate), in 1958 laid a pipeline through Syria. In 1950 gas consumption in the

USA rose quickly to 71 billion cubic metres which made up 2.5 times as much as

in 1946. In 1959 Exxon and Shell found large gas deposits in Groeningen in

Holland. In 1958 there was a start-up of the great basin Volga-Ural and cheap oil

flooded the markets. Big oil was also discovered in Libya in 1959 where oil was

produced by such companies as Occidental, Marathon, Conoco and Amerada Hess.

Lenin’s friend, Armand Hammer, produced 40 mln tons per annum there–then

he was the sixth in the world! The fact of oil discovery in Libya had an indirect

influence on the establishment of OPEC resulting from great oil concerns’ policy

of the so called posted price which pushed the reduction of oil prices. Oil production

costs in Venezuela were on the level of 0.8 dollar per barrel, and in the Arab

countries only 0.2 dollar per barrel. This is why it was Venezuela which exerted

the biggest pressure on the founding of OPEC. That organization was established

on September 10, 1960, in Baghdad but initially it did not play much of a role in

the world.

And in Poland...

Polski Monopol Naftowy [The Polish Oil Monopoly] was established on July 27,

1944, and in February 1945 its name was altered into Centrala Produktów Naftowych

(CPN) [Oil Products Head Office] which was incorporated in 1999 into Polski Koncern

Naftowy ORLEN SA [Polish Oil Company ORLEN joint stock company]. At the end

of 1945, there were 73 depots of oil products and 26 filling stations. The sale reached

121,800 tons, there was a significant import from the USSR and deliveries from

UNRRA. Till 1957, filling stations were equipped with hand distributors and then

with electric ones. In 1955 CPN operated 679 stations, in 1960–1005, then that

growth was rather slow, reaching 1335 stations in 1986. Generally, stations were located

22.5 km. from one another, covering on average 234 square kilometres and sold over

2000 tons of fuels per annum. In 1968, 296 stations began filling up cylinders with

LPG. In 1986, beside CPN, there were over 1000 sale points supplying fuels for rural

and transportation enterprises. There were also 16,902 garage stations but they sold

only 5% of the fuels and the rest was sold by CPN. The developing economy needed

more and more oil products. Here is some statistics relating to the 5-years cumulative

national consumption: 1945-1950–2.6 mln tons, 1951-1955–6.1, 1956-1960–10.

Table 15 clearly shows the shortages of the domestic output if we look at the origin of

those products.

Meanwhile, at the beginning of the 1960’s, oil processing reached a level of 1 mln

tons per annum, import of fuels reached two thirds of their consumption and the

number of filling stations exceeded one thousand. The idea of a new refinery

construction, reducing our dependence on oil products import, was very logical. In

1954, the Polish authorities began to consider the construction of a new complex

processing 1 mln tons of oil per annum; it would be delivered from Austria by railway

or by sea from Iran and then transported to a refinery situated in the south of Poland.

For a long time, the oil industry had been under the supervision of The Ministry of

Mining, then Mining and Power Engineering, and here it did not have a big chance of

development. But as late as 1958, when the oil industry was transferred to the Ministry

of Chemistry, they started considering the intention to build a new, so called sixth

refinery. These plans took concrete shape following the decision dated October 14,

1958, on laying the pipeline called Przyja [Friendship]. It was undertaken on the

basis of a common arrangement within the confines of RWPG [Council of Mutual

Economic Assistance–Comecon] after the start-up of the gigantic oil production from

the basin Volga-Ural. Ten localities were considered for the new refinery erection:

69


Trzebinia, including a refinery;

a postcard of 1900 printed by

B. Schunert in Oberstephansdorf

(chromolitography).

Trzebinia, including a refinery;

a postcard of 1899 printed by

Karol Schwidernoch in Vienna

(chromolitography).

Makinia, uków, Siedlce, Wgrów, Wyszków, Wyszogród, Pock, Lubartów, Warka

and Puawy. Finally, Pock was selected.

Since the time of the erection of Nowa Huta [New Ironworks] in Cracow it was

to be the greatest investment. The construction decision was taken on January 5,1959,

by the Economic Committee of the Government (KERM). In general, around big

industrial complexes of the oil sector there appear and develop urban agglomerations,

as is shown by many foreign examples. The Pock refinery was originally planned to

process the first 2 mln t/a, then 4 and then 6 mln t/a of oil. Petrochemical plants were

to be erected here for the first time in Poland–as it turned out, it was the only time.

Kazimierz Kachlik was the general designer, Antoni Rogucki was the general manager

of the construction, Pawe Nowak–the future general manager of the new refinery,

assisted by Jakub Tomaszewicz, Henryk Kozdrowicz, Wiesaw Kosut and several

others. A detailed report describing the history of the refinery construction is presented

in a monograph Pocka Petrochemia 1960-1985 [Pock Petrochemical Works 1960-1985],

which releases the Author from the obligation of very detailed reporting. This is why

it will be a short presentation.

The pipeline Friendship was solemnly started up on December 28, 1963, and

the first oil arrived in the Pock refinery on April 21, 1964 (that was obviously a

political anniversary, the 19 th anniversary of the conclusion of a Friendship Treaty

with the USSR; anniversaries were very popular then). On the memorable day of

August 17, 1964, the first oil distillation products were produced from CDU I

plant. Chronicles state that CDU I reached its full output capacity within 4 days. A

week later (August 23), the first train with oil products left the refinery. In December

1964, Reforming I plant was put into operation. The ceremony of the official startup

took place on December 21, 1964. Experts from the old refineries from the

south of Poland helped start up the Pock refinery and Henryk Kozdrowicz supervised

the start-up. His team consisted of experienced “oil men,” including Kazimierz

Wawszczak and Józef Pikulski. CDU I was managed by Ludwik Chrapkowski and

Reforming by Wodzimierz Derecki. In 1966, the first stage with a more complex oil

processing with a conversion unit, catalytic cracking, and bitumens was completed.

The development of the catalytic cracking process took place in the USA at the

beginning of WW II. That famous process, due to its excellent economics, is sometimes

called “a device to make money in the refinery” arrived in Poland through the USSR

and it is only at the Pock refinery. On the basis of the Minister’s decision dated

August 21, 1969, several design assumptions from the Initial Engineering Design

document were altered and the following processes were given up: dodecyl benzene,

glycerol, isoprene rubber, urea, surfactants, sulphuric acid, ethylbenzene and wax.

Oil processing capacity was fixed to reach 5.6 million tons per year.

As early as on August 7, 1968, Reforming II was started up, CDU II was already

in operation, in 1969 a lube oil complex, and on August 16, 1971, Reforming III

started working. It was plain to see that 6 million tons of oil was too little. This is why

on October 10, 1972, the Minister of Chemistry decided to expand the production

complex to 12 million tons of oil per year. Up untill 1975, there were other CDUs of

3 million tons per year each. The first 50 million tons of oil was processed on May 24,

1974, one hundred million tons on July 21, 1978, on November 12, 1982–150 million

tons, etc. The most oil was processed in 1978: 12,866,619 tons. The operation of

delayed coking unit was unsuccessful. In 1975 the plant was ultimately shut down.

Later there were more such “retired” plants.

New wave of innovations in the world

The period of 1959-1975 is called “the golden age of innovations” for the refinery

industry. It is then that most of the currently used processes were developed:

Platforming CCR ® (Continuous Catalyst Regeneration), the separation of n-paraffins by

adsorption Molex ® , p-xylene Parex ® (UOP’s names of processes), FCC (Fluid Catalytic

71


Krosno refinery; a postcard

ordered by Bernard Fischbein

in Krosno and printed

by the firm Weis Leopold

in Budapest in 1910

(varnished phototypography).

Krosno refinery; a postcard

ordered by Bernard Fischbein

in Krosno and printed

by the firm Weis Leopold

in Budapest in 1910

(varnished phototypography).

Cracking) was improved and we witness the mature processes of hydrocracking and

isomerization. There are treatment processes elaborated for all cuts yielded from oil

processing (for example Merox ® or deasphaltization), including aromatics and detergents

LAB (Linear Alkyl Benzenes). The properties of water adsorption and desorption from

natural zeolite were discovered in 1756 by the Swede Cronstedt and he appropriately

called the mineral (from Greek Zeo, to boil and lithos, a stone that released water

reversibly). In 1949 the research programme Linde was initiated (Linde was an affiliate

of UCC) and the UCC company introduced molecular sieves on the market in 1954

and later it was done together with UOP. In 1962 Mobil applied variant X to the

cracking catalyst (Mobil was granted 159 patents for synthetic zeolite catalysts and

among the inventors there is a Polish sounding surname, Edward Rosiski). Mobil

company is honored in the National Hall of Famous US Inventors. In the 1960’s the

first applications of PSA (Pressure Swing Adsorption) took place; they were later

improved. Then UOP developed isomerization Butamer ® and Penex ® . Here in Pock

we use almost all these renown processes and therefore I do not treat their enumeration

as advertising of UOP! In the 1970’s, there were modifications in the cracking process

into “riser cracking.” Then a full combustion was applied instead of CO burning. In

1961 a series of UOP’s hydrocracking process variants was implemented: Isomax ®

with Chevron and Unicracking ® with Unocal. In 1967 Chevron, for the first time,

introduced the chemical element rhenium to platinum reforming catalyst and applied

low pressure. In 1967 the Amoco process was applied (as in Gdask) but afterwards

CCR became unbeatable because interruption and the shortage of hydrogen for various

refinery units every 6 months did not threaten the continuity of operation. It really

was a breakthrough in refineries though initially it was not perceived very well.

Surprisingly, 20 years later there were 186 such units operating in 41 countries. But

probably the most popular was the Merox ® process–since 1960, 1650 such facilities

have been built! The process Udex ® was applied in over 100 plants though very

quickly, i.e. in 1962, it was replaced with Shell Sulfolane ® production of aromatics

process, later modified by UOP. The majority of the world aromatics was manufactured

with these processes. Also some European processes are well-known here, for example

Arosolvan ® , which is in operation in Pock. There also appeared such processes as

ethylbenzene production Alkar ® , cumene or even phenol. The end of the 1950’s

brought the Molex ® process; the Pacol ® dehydrogenation process was a break-through.

A similar process is Olex ® which was worked out in 1968. A new family of processes

called Sorbex ® was proposed. Since 1971, the process Parex ® has been applied in 54

plants in 20 countries. Tatoray ® and Isomar ® complete the range of heavier aromatics

conversion. Ipatieff’s catalyst was applied for the production of tetramer and

dodecylbenzene but in the 1960’s there were ecologists’ protests against detergents

yielded by those processes. It is an important fact that the General Initial Engineering

Design document for the Pock refinery forecast the construction of a dodecylbenzene

plant. After 1975 ethers plants were erected; the first ether plant–MTBE (Methyl

Tertiary Buthyl Ether)–was started up in 1974 in Ravenna. The Cyclar ® process was

worked out together with BP. Dehydrogenation process Oleflex ® was added later.

Cheap oil

The 1960’s brought more and more oil from California and Libya. In 1969,

Libya produced and exported even more oil than Saudi Arabia. Oil was very cheap,

similarly to the Soviet oil which spoiled the market. In 1961 the British army left the

Persian Gulf. After the 1967 war (and after 1973), the political and military situation

in the Middle East became very tense. It resulted in an oil embargo by the Arab

countries imposed on Israel’s supporters. It contributed to a wave of nationalization

of the oil industry–it was nationalized in Libya, Iraq, Iran and Kuwait. In 1972

Venezuela passed a new oil law. In 1980, Saudi Arabia took over Aramco–hereinafter

called Saudi Aramco. The 1960’s for the first time witnessed a special contract in

73


Drohobycz (Poland’s former

border land); a light naphtha

recovery plant; a postcard

printed by J. Pilpl in Drohobycz

in 1914 on the basis

of Lieberman’s photography.

Drohobycz; tanks at the light

naphtha recovery plant;

a postcard printed by

Leon Rosenchein in Drohobycz

in 1911 (phototypography).

Indonesia: PSA (Production Sharing Agreement). In 1962, Japan introduced a new

oil law and the almighty ministry MITI (Ministry of International Trade and Industry)

controlled the course of development of the national industry and eventually already

at the end of the 1960’s about 70% of the energy came from oil. In 1955, Europe

obtained 70% of its energy from coal and only 23% from oil; in 1972 the proportions

got reversed–22% came from coal and 60% from oil. The Western Europe refinery

capacities rose from 220 to 550 mln tons/y in 1960-1967. Cheap oil was accessible

everywhere. Oil exploration entered areas where climate created additional difficulties.

In the USSR, oil is in Siberia. Phillips Petroleum explored oil in the North Sea because

its geology was like Groeningen; after some time Phillips Petroleum wanted to

stop exploration but in 1969 it came across the Ekofisk field at a depth of 3000 m.

In 1970, BP discovered the Forties oil field and several new discoveries followed.

In 1971, Exxon and Shell developed Brent oil which nowadays serves as the basic

oil indicator for the whole world trade. In the sea the production conditions are

extreme–17 m. high waves and 110 km./h wind. In spite of such circumstances,

they managed to reach a depth of 6000 m. while waves were 30 m. high and the

wind blew at 200 km./h. The history of oil exploration in Alaska had been none the

less fascinating. The “big oil” was discovered on December 26, 1967, and that was

1.5 times more than West Texas, the biggest oil field in North America (after the

Saudi giant Ghawar and the Kuwaiti Burgan fields) discovered in 1930. In 1977, an

oil pipeline of 1300 km. connected that region with the northern states. In the 1980’s,

the output rose to 100 mln t/y. It was going to be the most important oil-bearing

region for the USA. Even today that region causes severe polemics whether or not to

expand oil exploration to other areas.

There were more and more cars in the world: in 1960 there were 98.3 mln

vehicles (in the USA 61.7 mln) and in 1970 193.4 mln (89.2 mln) respectively. In

1972, some US statistics report the number of 119 mln cars! The number of filling

stations in the period 1959-1969 rose because four times more fuel was needed than

in 1939. The 1960’s witnessed the idea of franchising–nets of company stations; there

appeared large stations with fast service, customers got special credit cards from large

oil firms, free maps, and free car service; there were also snack bars and customers

were becoming more loyal. A station in 1969 filled up a 20 gal. tank within 1-2

minutes which would have been sufficient for cleaning a windscreen and for the

payment. As early as in 1914 there were free maps available at the stations–today it

is a rarity. The construction of the net of highways between states was completed.

In the USA in 1958-1973, the government established import quotas which were

to protect American firms producing oil. The beginning of the 1970’s marked the

energy crisis in the USA. Although gas was sold on a regulated market, it was too

cheap. Therefore, there were not enough investments, like in California. Atomic energy

gained many followers. The peak load of oil production in the USA–552 mln tons–

took place in 1972 and already in 1973 import reached the level of 300 mln tons. In

1969 the USA had 263 refineries for 600 million t/y. In 1968 oil processing in the USA

reached 559.5 mln tons; in EEC countries–293.8 mln; in USSR 230–million t/y and

102.6 million t/y in Japan. The world needed almost 2 bln tons of oil! The world steel

production reached about 500 million t/y. The published attempt at comparing

incomparable GNP data (Gross National Product) per capita from that period provided

the following figures: almost $1000 in USA, $600 in Western Europe, $500 in socialist

countries and $200 in Japan. At that time, Saudi Arabia produced 420 million tons

per year which made up 21% of oil world production. In 1972 the USA needed three

times more oil then in 1948, Europe–15 times more. Poland needed yet more–about

50 times more. At that time the energy consumption in the US refineries reached

10%, calculating with regard to oil. The hydrocracking plant of 3.1 mln tons/y was

operating in Richmond and 30 plants processed, in total, 18.5 million t/y; in Europe

such plants operate in Germany, Finland, the USSR and in BP’s firm in Grangemouth.

75


Drohobycz; State light naphtha

recovery plant; a postcard

printed by J. Pilpl in Drohobycz

in 1910 (phototypography).

Drohobycz–Austria refinery of

Towarzystwo Akcyjne dla

Przemysu Naftowego;

a postcard printed by

J. Pilpl in Drohobycz and mailed

in 1914 (phototypography).

Drohobycz–Austria refinery;

a postcard printed

by Leon Rosenchein

in Drohobycz in 1910

(coloured phototypography).

In 1965 Western Europe got 42% of its fuel oil from processed oil and in 1975 it was

going to reach 60%. Atomic energy began to play a very important role in the

production of electricity and thus decreased the consumption of coal. This was the

time when the Roman Club, a trust of brains grouping over a hundred distinguished

scientists, announced its forecast in which it foresaw that in the year 2000 there

would practically be no hydrocarbons available.

The world growth of the petrochemical industry

In 1950 the already powerful chemical industry reached an annual turnover of

about 30 bln USD, in 1968–already 145 bln USD and spent 8%-10% of its turnover

on investments and from 2 invested dollars received 1 additional dollar of turnover per

year. Petrochemistry, which was based on petroleum products as its raw materials, was

the predominant part and a driving force. The basic product of petrochemistry–ethylene–

in 1968 was produced in the quantity of 13 million tons which made up almost twice

as much as in 1965. In 1966-1967, 26 ethylene plants were started up, including 18 at

the capacity of 200,000 t/y. When the Olefin I Plant was started up in Pock in 1971,

the average capacity was 300,000 t/y and there were also plants of 500,000 t/y! The

Cologne–Frankfurt ethylene pipeline 156 km. long and of 450,000 t/y was laid further

to Antwerp, Rotterdam and Lorraine. Polyethylene LDPE (Low Density Poly Ethylene),

the history of which began with ICI patent (Imperial Chemical Industries) in 1937, was

applied as an insulation of suboceanic cables in 1938 and 1939 and produced on a mass

industrial scale in England in 1942 and in the USA in 1943. It was also successfully

used for HF (High Frequency) cable radars. Also, the German Lupolen dates back to

1942. At the end of the war, they produced 4500 t/y, in 1966 the world could produce

as much as 2.7 million t/y (the USA 1.2 million t) and in 1968-1969 the world production

capacities reached 5 million t/y! The industry applied other types of those processes–

medium-pressure and low-pressure HDPE (High Density Poly Ethylene) and soon

the linear LLDPE (Linear Low Density Poly Ethylene). In 1970 the European HDPE

production capacities reached almost 0.6 million t/y, the USA–0.4 million t/y, Japan–

0.2 million t/y, the whole world–1.2 million t/y on Ziegler catalysts and 1.1 million t/y

with the Phillips Petroleum process. Polypropylene, the invention of the Italian professor

Natta, the youngest member of the polyolefins family, in 1969 in the USA reached the

production output of about 0.5 million t/y, in Japan–over 250,000 t/y but 7 firms’ total

output was 0.454 million t/y. Soon the world production capacities reached 1.3

million t/y. Earlier came the era of plastics! In 1955 an average new car had 5 kg of

plastics in its structure and 10 years later already 16 kg. In 1968 Brazil used 1.5 kg of

plastics per capita, similarly to Poland. The world produced 20 million t/y whereas in

1948 it was only 1 million! In 1969 Japan produced over 4 million t/y of plastics and the

USA–8 million t/y. Butadiene, which was a very important chemical from the military

point of view, in 1968 in the USA was produced in the amount of 1.5 million t/y, in

Japan–in 400,000 t/y, and Western Europe–in 765,000 t/y. In 1968 the firm ICI was

the second chemical company in the world, Hoechst was the fifth, Bayer the sixth, BASF

the eighth and Dow Chemical the eleventh. How different is today’s hierarchy !

Polish beginnings of the petrochemical industry

The use of oil as a chemical raw material–the key notion included in the name

“petrochemistry”–dates back to a very modest starting point: the production of 75

tons of isopropanol in 1925. On February 25, 1968, the Pock Refinery and

Petrochemical Works produced cumene, phenol and acetone from propylene and

benzene. On December 31, 1969, the process of hydrocarbons pyrolysis (steam

cracking) for ethylene production was initiated. Nowadays, the production of ethylene

makes up the basic foundation of the petrochemical industry, a measure of civilization

development. Still, a much deeper meaning was attributed, from the local point of

view, to a new butadiene plant started up in 1970, which manufactured a militarily

77


Borysaw–wax fields and oil rigs

on Potok; a postcard printed

by an unknown author in 1900

on the basis of a photo

by Wilhelm Russ in Drohobycz

and mailed in 1901

(phototypography).

Borysaw–stock corporation

for wax and earth oil

and Galicia Credit Bank;

a postcard printed

by an unknown author in 1902

on the basis of a photo

by Wilhelm Russ in Drohobycz

(phototypography).

Borysaw–Mikucki & Perutz oil

field; a postcard printed

by Leon Rosenschein

in Drohobycz in 1904

(phototypography).

essential raw material for the production of rubber, which in turn is necessary for the

tyre and rubber industry. These licences were purchased, thanks to intense diplomatic

efforts, in spite of the US embargo. The production of ethylene, propylene, ethylene

oxide and glycols was started up. On July 21, 1971, a polyethylene unit was started

up, and then, aromatics, polypropylene and paraxylene plants. In 1976, the refinery

units were added: II Catalytic Cracking (FCC) and HF Alkylation which were

connected with the petrochemical part by means of propylene from FCC and gas feed

stocks prepared in the petrochemical part of the works for alkylation. The capacities

of polyolefins were expanded. A large Olefin II unit enabled the increase of the

production of ethylene, among others for Wocawek Chemical Works and its polymers,

as well as obtaining more butadiene and benzene. The most recent facility, started up

on September 20, 1983, was Ethylene Oxide II plant together with the production of

ethylene glycols, though the idea of a polyester plant construction in Pia was given

up. And here in Poland, where coal over shadowed everything, the climax of

petrochemistry was in the 1970’s when the era of plastics flourished. We were granted

only 15 years of the petrochemical industry development and it is in the second half

of the 20 th century that this branch of industry became the basics of chemical industry.

Professor Taniewski stressed the fact that 95% of the organic synthesis products is of

petrochemical origin, not to mention hydrogen and sulphur from oil and gas which

are commonly produced. The petrochemical industry, through its activating influence

upon the development of other industries, significantly contributed to the growing

general prosperity worldwide. Then, maybe now, together with the world chemical

potentate, Basell, the Polish petrochemical industry will regain its grandeur.

...and the golden age of refinery

Chroniclers define with nostalgia the 1970’s as the golden years for refineries. At

that time, we produced 1.5 million t/y of bitumens. In 1972, a decision was undertaken

to erect a refinery in Gdansk. The Italian SNAM Progetti was the general contractor

and the start-up took place on July 1, 1976. Crude oil came from the Middle East.

The southern refineries did not develop so quickly. The Czechowice refinery was hit

by a great fire in 1971. In the period from 1976 to 1981, there were attempts to

consolidate those refineries: three south-east refineries and two Silesian ones were

merged into two groups but that experiment brought little effect. Here we can mention

some interesting personal careers, for example Zdzisaw Tomasik, Ph.D., the future

professor at Wrocaw Technical University, was the general manager of the Czechowice

refinery for a short time, before that Kazimierz Kachlik was the manager’s deputy,

Kazimierz Klk, the future minister and diplomat, became the manager after the

great fire and afterwards was also the general manager in Pock. General managers in

Gdask and Pock were Woroniecki and Nikiewicz. Professor Kotowski, Wadysaw

Wawak, Czesaw Dolasiski and Konrad Jaskóa also contributed to the history of

the Pock complex.

Oil Shocks”–oil weapon of oil producers

The oil shock of 1973 hit the developed countries unexpectedly enough. As ten

years before, during the Cubian crisis, the USA and the USSR introduced a nuclear

alert but negotiations prevented a global conflict. Just afterwards, the recession of

1975 hit the USA very hard–GNP dropped by 6% in comparison with 1973. In

1974 Japan, for the first time after the war, experienced a set-back of economic

development. Oil prices rose shockingly–since then it is well known that their level

should be balanced: if they are too high then other forms of energy and its sources

would have become more profitable and oil would have stayed untouched, as the

famous Sheik Yamani used to tell his countrymen. In 1973 the OECD (Organization

for the Economic Cooperation and Development) established the IEA (International

Energy Agency). In fact, oil disappeared from the power industry. France introduced a

79


Borysaw oil rigs; a postcard

printed by J. Klein

in Cracow in 1908

(coloured phototypography).

Borysaw-Horodyszcze–

a postcard printed

by Wydawnictwo Wspóczesna

Sztuka in Przemyl in 1910

(varnished phototypography).

prohibition of fuels advertisement which lasted 15 years. The IEA worked out the

strategies of oil savings but, on the other hand, they recommended high tech for Japan

or atomic and coal energy for France. There was a common hatred towards the oil firms

in the USA for their profits. The Senate committee investigated the matter, though

profits came mainly from upstream activity. President Gerald Ford’s gigantic plan of

1975 assumed the construction of 200 atomic power stations, 250 coal mines, 150 coal

power stations, 30 large refineries and 20 factories producing synthetic fuels–but it all

was too expensive and eventually only TAPS (Trans Alaskan Petroleum System) pipeline

from Alaska for 10 bln USD was completed. The standard CAFE (Corporate Average

Fuel Economy), which was introduced in 1975 to save fuels in the USA, resulted in the

decrease of gasoline consumption from 18 l/100 km. to half of that 10 years later.

Mexico, which in 1972 produced only 25 million tons of oil, discovered new oil

fields located more deeply–after 1973 oil was present in Campeche Bay (in the Mexican

sate Tabasco), in an oil field called Reforma or “Little Kuwait;” in 1976 oil production

increased to 41.5 million tons and in 1980 it reached 95 million tons. But the bank crisis

in 1982 marked the end of prosperity. However, at the turn of the 1970’s and 1980’s, oil

from Mexico was available. Canada also had oil. Venezuelan PdVSA (Petroleos de

Venezuela SA) has been the second oil company in oil producing countries, after Saudi

Aramco since 1976, Pemex was the third. Since 1983, Venezuela has granted licenses on

oil exploration and production but now president Chavez tends to stop that trend.

Yet a more severe crisis was caused in Iran by the Islamic revolution–the oil

price converted into the present currency value, including inflation rate, exceeded

90 USD/bbl! In 1979 in the USA, drivers waited in queues for petrol–what a rare

picture! In 1978 oil made up 53% of the world energy and fell to 43% in 1983!

President Carter announced an odd plan: “energy–a moral equivalent of war”–its acronym

sounds to jokers as something like a cat’s call. During the crisis, the market share

system was in force. The programme at the beginning of the 1980’s with the

participation of Unocal, Occidental and Exxon was oriented on bituminous shales,

coal and similar feed stocks–and so synthetic oil entered the market. Saudi Arabia

increased oil production to 525 million tons and it reported a record income. In

1979, there was a breakdown of an atomic power station at Three Mile Island near

Middletown, Pennsylvania, and that fact marked “stop” to atomic power. Diversification

of activities in companies became fashionable after the oil shocks. At that

time, Nigeria nationalized its BP’s assets due to BP’s trade contacts with South Africa.

Russia was fighting in Afghanistan. Iraq, which imposed an embargo on Egypt in

1979 the peace treaty in Camp David, in 1980 attacked Iran (in 1981 Israel destroyed

the Iraqi atomic weapon systems), which reduced much oil inflow onto the market.

Oil became dear again and there was a general recession. OPEC reduced oil production

from 1.55 million bbl/d to 0.9 million bbl/d and respectively decreased quotas for its

members to preserve high prices. Saudi Arabia played a special, so called buffer role,

swing producer. The following countries exported oil: Indonesia, Nigeria, Egypt,

Malaysia, Angola; China produced its own oil in 1980’s. In 1983 Great Britain

produced as much oil as Algeria, Libya and Nigeria together. Competition made oil

prices fall. The world decreased oil consumption from 2.6 bln tons in 1979 to 2.3 bln

tons. After 1982, a new system of oil trading was initiated, i.e. spot trading and oil

entered the world stock exchanges.

Poland at that time...

Poland experienced a so called “steered development of planned economy” but

the privately-owned vehicles started to play an important role as petrol consumers.

Table 16 presents data on the number of vehicles on the basis of statistical information

provided by the State Insurance Company PZU.

The oil products consumption in a 5 year period raised quickly: 1961-1965: 18.8

million tons; 1966-1970: 32.2 million; 1971-1975 49.4 million and in 1976-1980:

81


Borysaw–tank cars being filled

with petroleum; a postcard

printed in 1910 by J. Klein in

Cracow (phototypography).

Borysaw–Popiele oil field;

a postcard printed in 1908

by Leon Rosenschein in

Drohobycz (phototypography).

71.4 million tons whereas in 1981-1985 that consumption fell to 62.1 million. Through

these 5 years the cumulative volumes look considerable but they are hardly on the

level of an annual consumption in Spain with a comparable number in population!

This is a measure of our technological gap and staying out of the main development

stream of the European countries which are not too rich, anyway. Table 17 provides

more precise data for Poland.

The long-distance pipelines going through Pock were started up in 1968 to

dispatch motor fuels. In 1986 they pumped 4.9 million tons. In 1985 CPN’s [Oil

Products Trading Agency] turnover reached 22.5 million tons: by pipelines–4.9 million,

by railway–12.5, by tank trucks–4.5 and by ships–0.6 million tons.

Oil import played a significant role in foreign trade. Table 18 presents oil import

in thousands of tons.

In 1963, the first section of “Friendship” crude oil pipeline was started and in

1973 it was necessary to start the next section. The really big oil import from the

west started in 1973, from Algeria, Libya, Iran, Iraq and for re-export from Nigeria

and Angola. Sea oil transportation was little; a bigger one started after 1975. It is

then fhat Poland bought 6 oil tankers. The peak of import, and import in general,

took place in 1980. but after that year Poland lacked foreign currency. This is why in

1980 a pipeline from Pock to Gdask was set in motion. Seller’s special prices were

applied in oil purchase from the USSR; in 1985 it reached the level of world prices.

The world was still in an oil crisis after the Iranian revolution. Almost 50% of the

refineries were shut down in the developed countries because of the oil price, so far

the highest in history. If corrected by the inflation index, in 2002 it would have

reached over 90 USD/bbl and till 1986 it had not dropped below 50 USD. The

socialist economy could not have survived such a blow.

Import and export of oil products (in thousands t) is presented in Table 19.

Oil import from the west was small but qualitatively important–mainly high

class lube oils and additives were imported. The high import in 1973-1975 from

Eastern Europe was paid in US dollars and therefore it was considered as trading with

the west. Gas oil was exported to Western Europe as a light fuel oil. There was a

quick rise in export of petrochemical products during the 1980’s, among others to

Asia. However, fuel oil was dominant in export. On the home market, there was

almost no demand because the Polish economy was based on coal, whereas other

countries replaced coal with fuel oil. In the end of the 1970’s, the national consumption

of fuel oil considerably rose and in the beginning of 1980’s it fell to 400,000-500,000

tons/y. Gas oil L-II was exported to western recipients as heating oil and its national

consumption was small. Table 20 represents export data.

During the 1970’s, the surpplus of petrols was exported, including those with

higher octane number (91, 94 or 98) than the ones used here. In 1975 and 1976

these were base petrols and naphtha (Table 21).

Export was ephemeral and fuels were intended for export during off-season.

There was a shortage of storage capacities. In the 1980’s, the Gdask Refinery began

exporting base oils. Export of petrochemicals from 90,000 tons in 1980 reached

155,000 tons in 1985, exclusively to the West (propylene, aromatics, glycols, plastics

and others). The assigned oil processing–being a form of export and trade in general–

also took place in Polish refineries. Table 22 shows once again oil processing volume

and import of finished oil products.

The world after crisis... oil concerns

At that time, integration of firms provided fewer advantages: there were firms

with “value gaps” (the difference between a firm’s value and its shares) and a new

kind of “war” broke out: wars through taking over. Such firms as Cities Service,

Conoco, Marathon, Getty and Gulf were taken over by others. Many firms went

bankrupt, for example Cities Service in 1982 in the US, being the 19 th in rank, was

83


Sporne near Krosno–Noe oil field;

an unknown author’s

photograph of 1910.

bought out by Hammer which in 1981 also bought Occidental. Conoco, which

formerly belonging to Standard Oil, and in 1981 purchased by DuPont. In 1983,

Chevron bought Gulf Oil for the huge sum of 13.2 bln USD.

...petrol stations

During the 1970’s and the 1980’s, the consumption of petrol decreased. Fewer

new stations were built but they were more expensive, more modern, they had intercom

to communicate with customers, remote control and self-service (the change of fire

protection law made its development possible). Free services disappeared. In the USA,

the number of gas stations dropped by about 50,000. In 1978, 68 mln customers had

credit cards for oil firms. Gas stations still sold car parts but garages and car showrooms,

by the end of the 1970’s, started to take over more and more of that business. In 1978,

the law protected small business and it forbade the largest 16 oil concerns to sell their

petrol at their own stations. Thus franchising with the exclusive right to sell one’s own

brand name became less profitable. In 1980 there was a drop of about 30% of the gas

stations and a “divorce” law ordered the refineries to sell a lease their stations (then it

was possible to sell 2 brands). Generally, in 1982 franchising was developing very

fast–they sold cars or tyres in this way. There were two opposite theories, i.e. dual

distribution (i.e. wholesale+retail), also defined as “bad birds of prey” or vertical

integration. Tests showed that integration was more effective, however it depended

on the sale of petrol more than other goods and services. In 1980 there were 121.6

mln cars in the USA and 320 mln worldwide.

...refineries

In the 1970’s, the refinery industry in the USA and Europe differed with respect

to the complexity level of oil processing, i.e. the proportion of conversion processes

capacity towards the quantity of processed oil. For example, in the USA the yield of

fuel oil from crude oil was lower and amounted only to 20.2% (residues: on the average,

6% in the USA and 55% in Europe). In the USA, they produced as much as 50%

petrol from oil, whereas in Europe only 14%. In the beginning of the 1970’s, the

processing capacities of the fluidal catalytic cracking process in Europe reached only

6% with regard to processed oil and 1% in hydrocracking, whereas in the USA it was

48% and 4% respectively. The percentage of reforming and hydrodesulphurisation

processes was also higher in the USA–22% and 32%, against 13% and 23% in Europe.

The processes of visbreaking, coking, alkylation and polymerisation, quite rare in

Europe, were already applied. Reforming units used 7-10% of their capacities for the

production of aromatics; two thirds of them came from that origin, the rest–from

steam crackers. A stricter work regime and more improved catalysts were applied.

Dealkylation of toluene to benzene lost its economic efficiency quite quickly because

in Europe the production of ethylene from naphtha produced a lot of benzene. The

first modern export refineries of the “all hydrogen” new era were constructed in Kuwait,

with hydrocracking–as in Pock–of the distillates and residues facilities (Shuaiba–

Isomax ® and H-Oil ® ). Catalytic cracking was accompanied with more and more common

refinements: new catalysts, heat utilization, improved regeneration, power recovery,

hydrodesulphurisation of feed stock, and propylene recovery. In this way, the cheaper

cracking process technology defended itself not to give way to considerably more

expensive hydrocracking process. Obviously, the development of the refinery industry

was also accompanied with more or less serious catastrophes: for example, in Feyzin,

the next one in Texas City (butadiene plant), explosions at ethylene plant in Geleen

and in the control room of the German VEBA company.

Already in the 1970’s the refinery in Pock was exceptional. It followed the

American, rather than the European pattern of oil processing. Before the start-up of

the FCC II unit in 1976, the refinery produced about 1/3 of its fuel oil from the

processed oil feed stock. As early as in the 1970’s, we tried to produce unleaded

85


Borysaw (Poland’s former border

land); oil refinery

of Galicyjsko-Karpackie

Towarzystwo Naftowe (formerly

Bergheim & Mac Garvey),

a postcard printed

by Leon Rosenschein

in Drohobycz in 1904

(phototypography).

Tustanowice (Poland’s former

border land); explosion of Oil

City–the biggest oil rig;

a postcard printed

by Leon Rosenschein in

Drohobycz in 1908

(phototypography).

petrol of 91 octane. The development of the Complex finished at that time, after

building the commissioned plants of Olefins II and the second plant of ethylene oxide

and glycols. It is worth reminding people here of the exceptionally successful start-up

of the olefins plant!

...ecology becomes priority

The last 50 years of the oil industry were marked by stronger and stronger emphasis

put on ecology. This notion was coined by Haeckel during the 19 th century; the science

combines elements of physical, biological and sociological sciences. In 1935, Tansley

defined the ecosystem. Daniel Yergin distinguished the first impact of ecology as the

moment of departure from the predominant role of coal, the second impact being the

set-back of atomic energy development and the present third phase consisting in

general pro-ecological legislation.

The CAA law (Clean Air Act) passed in 1970 in the USA, assumed a 90% reduction

of carbon oxide, hydrocarbons and nitrogen oxides in exhaust gases within 5 years. In

1974, car producers started to mount a catalytic converter made from precious metals,

which required the use of petrol without lead. There was a problem of sulphur content

because vehicles emitted aerosols of sulphuric and sulphurous acids as well as sulfates.

It immediately turned out that unleaded petrols had lower octane numbers, petrol

consumption rose and there was a shortage of gasoline. Generally, Europe aimed only

at the limitation of lead content in petrols from 0.4 to 0.15 g/l. It was later that it was

claimed that gasolines of 95 and 98 octane numbers meant optimum from the point

of view of their production and consumption. In 1967, earlier than in the USA, Japan

passed the environmental protection law which was less severe than the American

one. Afterwards, many changes in the petrol quality requirements took place. After

the elimination of lead in 1989, they lowered the RVP level and in 1992 the content of

benzene. But it is Europe which is the leader in raising fuels specifications. The WWFC

(World-Wide Fuel Charter), grouping car manufacturers strives for the unification of

fuel quality and standards in the whole world.

Levelling of the development chances?

The world was aiming at the leveling of the discrepancies in the economic

development. UNIDO Declaration from Lima of March 1975, confirmed by the UN

General Assembly, assumed the achievement of 25% of the world industrial production

by developing countries. Petrochemistry, which was widely perceived as the animating

power of progress, in 1950 reached 3.5 mln tons of production and 70 mln in 1976–

an average growth rate of 14% p.a. within 25 years! It was developing cyclically,

which was affected by mutual substitution of products and emerging new technologies.

The chemical, organic industry was the first industry of intensive R&D. Already at

the end of the 1940’s, industry began to move away from coal and in the direction of

eight basic chemical products which could be manufactured more cheaply from crude

oil and gas: ethylene, propylene, butadiene, benzene, toluene, xylene ammonia and

methanol. In 1950 the petrochemical industry consumed less than 1% of all the oil

but in 1976 it was about 4.5-5%. The processing industry based on petrochemicals

could be built more cheaply then, creating many new jobs. Since the 19 th c. Germany,

France, Great Britain and the USA developed carbochemistry. At the end of WW II,

all basic petrochemicals were well-known and produced. But only the USA produced

a lot of oil–other countries did not have any reason to change their raw material base.

Soon the number of refineries rose 2.5 times more quickly than the GNP. Also the era

of coal seemed to end. Europe and Japan, competing against the USA, had to erect

big, world-scale units and the technical progress became faster and faster. Professor

Marian Taniewski (Przemys Chemiczny [Chemical Industry] 1987, vol. 5, p. 223) who

was mentioned earlier, described this process in the following way: The structure of the

industrial organic synthesis, defined from the point of view of the type of feed stock, is very simple.

87


Borysaw (Poland’s former border

land); 8000 oil fielders striking

in 1904; a postcard printed

by Leon Rosenschein

in Drohobycz in 1904

(phototypography).

Over 95% of the world production is based on oil and natural gas. Less than 5% of the products

are produced from coal and renewable resources of the agricultural or animal origin.

The world production of synthetic materials in millions of tons is shown in Table 2

and the production of the main petrochemicals in thousands tons is in Table 24 while

Table 25 displays production shares of particular regions in the world production.

The production of plastics in the period of 1950-1970 doubled every 5 years. Later

that growth was only about 50%. In production of synthetic fibers, the growth was

from 5 to 11%, in production of synthetic rubber from 17 to 23% annually in our part

of Europe! In 1977 the USA together with Europe and Japan had 92% of the ethylene

production capacities, 93% of the butadiene and 97% of the benzene of the whole

world. In 1976 the world resources of oil were estimated at 87,606 million tons, including

50,160 million in the Middle East. Eastern Europe, which was next after the Middle

East, had 11,109 million tons–more than North America with 5116 million and

Western Europe with 3353 million tons. The consumption of oil reached 2879 million

tons. In 1974, plastics made up 58% of the petrochemicals, with 14% for fibers,

rubber and detergents each. In the USA, the value was added in the following way:

9 USD/bbl to the price of a barrel when processed at the refinery and 13 USD/bbl

when petrol is the final product. However, with regard to petrochemicals like glycerol

(this product was included in the general preliminary design for the Pock complex

and now–what an ironic twist of fate!–its production has grown in view of the biodiesel

production increasing so dynamically at present!), it was already 50 USD/bbl! Further

processing gives the value of 100 or even 200 USD/bbl and, what is more, the

development of other industries. There were over 200 products of petrochemistry

manufactured in big quantities.

Unfortunately, the world did not follow the Lima Declaration but went towards

globalisation.

Is there a good energy policy?

The analysis and data presented in the American Petroleum Institute (API)

materials entitled Oil and the USA federal government policy after WW II is very interesting

and instructive. The main objective of that policy is the assurance of the state energy

security, also for the correction of any free market distortions, i.e. too high fuel

consumption and excessive dependance upon import. In 1948, the USA became the

oil net importer because the national production was more expensive. Therefore, in

1955 the state introduced the control of import, which lasted till 1973. Such policy

resulted in granting production or consumption percentage limits; import licenses

were awarded and quotas established. It was ineffective and in 1959 they started to

introduce changes: refineries were granted limits inversely proportional to their

processing capacity. Then small size firms, or newly established ones, or petrochemical

companies were granted preferences for the import from other countries. And again

it turned out ineffective–import grew to 1/3 of the consumption which generally cost

consumers about 50% more than in the free market circumstances.

The oil prices and quotas control in the period from 1971 to 1981 were part of

the control system of prices and remuneration. Price control of other goods lasted till

1974, while oil prices were under control till 1981. Contingencies were for small

firms and prices were established on the basis of costs which were lower than the

world prices of fuels. It resulted in the redistribution of income from manufacturers

to consumers. Small refineries took advantage of that situation but when the control

was lifted, they went bankrupt because they could not bear competition. Further

results of price control consisted in petrol shortages, excess of heating oil, and low

efficiency of refineries and distribution. Natural gas prices were also under control

from 1954 even till 1993, which was motivated by its natural monopoly character.

The results were the following: consumers’ subsiding, excessive consumption and

ineffectiveness. Therefore in 1975 the new law on CAFE was necessary for new car

89


Równe near Krosno;

a postcard printed in 1910

by L. Majewski–a photographer

in Tarnów and Iwonicz

(coloured phototypography).

Równe near Krosno–an oil field;

a postcard printed in 1935

by an unknown author on the

basis of a photography

by St. Mucha in Cracow.

models, in 1978–encouragement of power engineering and industry to give up oil and

gas in favour of coal. Then, unexpectedly, there was an excess of gas and in 1986 the

prohibition was lifted. On the other hand, ecologists fought against the use of coal. The

establishment of IEA caused the founding of SPR (Strategic Petroleum Reserves) in

1975, as well as strategic oil reserves, stored at the cost of the state. Those reserves were

used, so far, only once in 1991. Thanks to a worldwide coordinated action after Iraq’s

invasion on Kuwait, it was possible to maintain oil prices on a decent level. Alternative

fuels were a consequence of the shocking growth of oil prices. In 1980, the state company

producing synthetic fuels was established. They planned to produce 100 million tons in

1992. They erected three coal gasification plants and one for production of synthetic oil

from bituminous shales. However, only oil prices which equaled 30-40 USD/bbl would

make this production profitable, so in 1986 they gave up these projects.

Excise duty–its federal share–was mainly spent on highway construction. Then

it rose considerably and from 1990, in some part, it also went into the budget. Federal

lands were hardly made available to oil and gas companies for leasing and there one

could find 85% of the undiscovered oil and 40% of the gas, but the public opinion

did not allow the learing for environmental reasons. Since 1980, the national park

ANWR (Alaska National Wildlife Refugee) in Alaska has been a very controversial

issue in this context. Since the 1970’s, oil companies have been criticiled for

monopolistic practices. They have tried to vertically divide integrated firms in three

parts. It related to such large ones as those of oil production over 5 million t/y or

refineries processing over 15 million t/y. The principle was that pipelines could not be

their property. In some states they were even forbidden to own gas stations!

Generally, such energy policy did not find acknowledgement. Environmental

interventions were recognised as well-founded, when there was domination of one

entity or dishonest price practices as well as in circumstances when intervention itself

did not cause significant distortions.

Regulated market

The American gasoline market was regulated with so called “concentration”

(which the Ministry of Justice associated with domination, monopoly or lack of

competition). It was measured with the Herfindahl index (the sum of squared shares

on the market can’t be higher that 0.18) or the Herfindahl-Hirschman index (the

share of the 4 largest firms below 50%, then 70%). The west was the most concentrated

region–4 concerns possessed over 50%. Half of the USA the gasoline production

came from the south, almost 1/4 from the north-eastern states and import was oriented

mainly towards the eastern coast where the consumption was the biggest and the

production was smaller than 30% of the consumption. Also, the north-east states

production met only 3/4 of their needs, the west met its demand in over 90% and the

south exported 2/3 of its production mainly eastwards. Pipelines transported 74% of

the consumed gasoline. The period 1977-1989 resulted in a profit rate (net profit to

capital) considerably lower than for firms of other trades and thus out from 314

refineries in 1981, in 1989 there were only 183 and nobody erected new ones any

more. Investments were mostly spent on more complex oil processing and revamping

of existing facilities as well as rehabilitation of the distribution grid. The wholesale

margins of profit were not high. Business was made only on world-scale refineries–

over 10 million t/y and above. All 10 leading US concerns had over half of the

production capacities, each of them with over 25 million t/y of the oil processing.

But market adjustments were made all the time. In 1981 prices went down so the

“minimum prices” were legally in force but being discordant with principles of the

free market and free competition. That is why they can be subject to antimonopolistic

interventions for “dishonest trading,” dumping and equal prices. A lock-up of profit

margins was in force in the period 1973-1981. The experiment of small retailers’

protection turned out costly and it did not hold back their bankruptcies.

91


Ropienka near Sanok–an oil rig;

a photographic postcard of 1901.

Peczeniyn (Poland’s former

border land); the first oil refinery

in Galicia; a postcard printed

in 1905 by Moses Schlossberg

in Peczeniyn (colour printing).

Finally, the 1980’s brought the liberalization of the oil industry in the USA as

well as in Europe.

Twenty years earlier... than today–and afterwards

Thus the world had over 700 refineries, not too complex, without the deepened

processing technology, and in the 1980’s about 200 of them were shut down. It is

assumed that hydrocarbons were really under control of only about 100 companies

from 20 countries.

In 1985, the USA got out of the recession and the economy was at its prime.

Great Britain experienced extended privatization and Prime Minister Margaret

Thatcher dissolved the state-owned British National Oil Co., which from 1975 had

had 51% of the shares of the oil fields of the British sector in the North Sea and it fixed

prices in order not to support OPEC. France acted towards a free market and resigned

from the state economy; thus the world economy grew without the oil “drive.” Europe

bought gas from the USSR. There were large quantities of stored oil and oil began to

disappear as a subject. It became an issue as any other issue. Saudi Arabia, playing the

role of a buffer of the oil market, sold only 110 million t/y, which was only half of its

quota because other OPEC countries exceeded their quotas. For Saudi Arabia, it meant

only 1/5 of the output which it had produced 5 years before. In such a situation of

decreased income a brilliant idea was born, i.e. netback, to defend exported quantities.

This meant sharing the profit margin with refineries. Thus, in 1985 trade was intensified

and at last refineries had money. Prices fell, the British state treasury suttered a loss and

that was the third oil shock–such a different and reversed one. The index oil price for the

western hemisphere, WTI (West Texas Intermediate) dropped to 10 USD/bbl, Arab oil

cost only 6 USD/bbl and world players started to struggle for markets. The government

of Norway resigned because its income from oil was decreased by 80%–the free market

had developed too far. History repeated itself: overproduction, prices fluctuation, quotas,

waste of energy, capital and oil. Only a decrease in production could be the medicine but

no company wanted to start by itself. Everybody cursed Saudi Arabia; Sheik Yamani,

who for 24 years was the architect of his country’s oil policy, lost his ministerial portfolio.

But OPEC agreed to a compromise: they “gave back” 50 bln USD to importers and in

1986 the economic growth was still maintained and the world inflation declined. In

1988 Saudi Arabia established joint companies with Shell and Texaco in the USA and

could process 30 million t/y of its own oil (in 1985 only 1.3 million t/y). Similar actions

were undertaken by Mexico and Venezuela founding firms in the USA (Venezuela also in

Europe–Ruhroel in 1980 in Germany and Nynas with the Finnish Neste, known for

bitumens). In Saudi Arabia, one of the Japanese companies could produce oil which

covered 15% of the import demand of this 99% dependent-on-oil-import country.

Thus another philosophy turned out to be victorious in international relations–

one could see the willingness to prefer economy issues over politics and an air of

cooperation, not confrontation.

The year 1989, “baptized” as annus mirabilis–was a miraculous year in the end

“cold war” and petrol in the USA was the cheapest since WW II. Oil reserves were

increased, somehow with an administrative move, to 140 bln tons in 1990 from 94

bln in 1984 and two thirds were located in the Persian Gulf countries. In 1990, the

USA consumed about 100 million t/y of oil less than in 1986 but import was growing

and the margin of energy security was shrinking. In 1990, the world had 440.7

million personal cars, including the USA with its 147.9 million.

The last decade and...

In 1991, 7 of the largest OECD countries paid to their budgets the total of 200

bln USD as fuel taxes, which meant 1/3 of their oil products value. Europe applied

fiscal policy to the largest extent. As a result, the USA and Canada increased their

taxes. Much of these taxes were spent on various subsidies. Thus relations got distorted

93


Borysaw-Tustanowice (Poland’s

former border land); a fire

of Oil City oil rig; a postcard

printed in 1905 on the basis of

Tadeusz Rybkowski’s watercolour

by J. Czernecki in Wieliczka.

and fuel competitiveness in the integrating world at growing free trade worsened.

Surely they shaped the consumption of oil, its price and exporters’ profits. The USA

had the largest consumption of oil per capita, even three times higher than the other

leading economies of the world.

In the meantime, Iraq attacks Kuwait and again oil becomes a commodity which

must be struggled for, like in the whole 20 th c. 600 oil wells flared, from 200 million t/y

of Kuwait production 150 million t/y was out, prices grew, but OPEC and IEA mastered

that dangerous situation. Russia had 60% of its export income from oil and gas, the oil

industry lost its exceptional role and it became like any other industry. Germany and the

Pacific countries were capable of developing without oil and Japan with its huge import

became the world’s banker. Ecology became more and more important as well as gas

and alternative fuels. The conflict between energy and environment, about the limits of

development and about cooperation, was more and more vivid.

...time for changes in Russia

The 1990’s brought the beginning of the restructuring of the Russian oil industry

after the fall of the USSR. That process lasted till 1995 but even at present great

changes are taking place. As a consequence, 12 big oil companies, usually vertically

integrated, were established. At the end of 1991, the largest of them, Lukoil, was

founded. However, the production of oil fell drastically–from a record of 616 million

t/y in the 1980’s to a level of below 300 million t/y. It is only recently that the

production has been growing and has exceeded 350 mln t/y. Many large projects to

produce oil with international partners were undertaken, for example in the Republic

the Komi, in the region of Archangielsk, or recently with Exxon in Sakhalin, and

there are many small projects under way. The most spectacular event was the second

BP’s entry into the Russian companies. This time the TNK [Tiumieskaja Nieftianaja

Kompanija] had already controlled Sidanco since 2001 and had established the thirdin-size

company in Russia in which BP’s 50% marked the largest direct foreign

investment, FDI of 6.75 bln USD! Before that, in 1996, Arco (now belonging to BP)

joined Lukoil with 7.99% shares. In 1998, Lukoil took over the shares in the Romanian

refinery Teleajen (Petrotel) and Bulgarian Burgas (Neftochim) and in 1999 the refinery

Odessa in Ukraine; it is also present in the USA. Other Russian companies also manifest

strong tendencies of expansion. In 2002, Yukos bought shares in the Lithuanian refinery

Mazieikiai from which an American company Williams withdrew (it had been there

since 1998). Yukos also bought shares in the Slovak company operating an oil pipeline.

Yukos also used to deliver oil to Poland. In Lithuania, there is an active company

Sibur–a petrochemical agenda of Gazprom, which is also present in Hungary and the

Ukraine. Russian capital is also involved in the Belorussian refineries. Slavnieft’s shares

were passed to TNK and Sibnieft. Surgutnieftiegaz and Sibnieft (the latter was to

join Yukos twice) belong to the largest companies in Russia. Russia increased its oil

export capabilities; not long ago, it was the second oil exporter in the world. It operates

a pipeline to Novorossiysk, also for Caspian oil, and a new pipeline to the Baltic coast.

It uses the harbour in Primorsk, pipelines through Poland, Lithuania, Latvia as well

as transports oil by rail through Estonia–one of few countries in the world that use

shale oil. There are plans to lay pipelines from Russia to Japan and China, with a final

harbour in Murmansk. Russia tried to join WTO (World Trade Organization) but it

does not want to raise (and to make them more real) its internal oil and gas prices (till

2007) which are 5-6 times lower than the world prices (raising them is the condition

to join WTO). However, Russia’s refineries and its net sale are slowly rehabilitating.

...and oil is still a strategic commodity

Oil, which determined the past century being the most valuable of goods, in the

1990’s initially had a rather moderate price, lower than 20 $/bbl which was due to

the Russian and south Asian crisis at the turn of 1997, and throughout 1998 it was

95


Borysaw-Tustanowice (Poland’s

former border land);

oil rigs in fire; a postcard printed

by Leon Rosenschein

in Drohobycz in 1908

(phototypography).

Borysaw-Tustanowice;

explosion of Oil City oil rig

(250 tank cars daily output);

a postcard printed by

Zygmunt Tabak in Borysaw

in 1908 (phototypography).

even cheaper than $10/bbl Afterwards, its price grew to a level which, since 2000,

has initiated worries of the next oil shock. In 2003, the strike in Venezuela and the

intervention in Iraq hoisted the oil prices. Speculations on “the new order” in Iraq

foretold the comeback to moderate prices but still there is no stabilization there.

Strikes in Nigeria or OPEC policy causes that prophecies do not want to come true

and the price of $30/bbl is quite probable. There is an obvious need for compromise

in petroleum prices–there are opinions that its fall by 10 USD/bbl from the level of

30 USD/bbl could cause the world GDP growth of about 0.5%! However, in 1998

the OPEC countries, with $150 bln of income a year before, earned about $50 bln

less, the least since 1972, which caused definite negative results for investments in

this industry, not to mention various serious social consequences. In 1996, the world

needed 3.6 bln tons of oil and although that demand hardly incresed recently (to 3.8

bln/y), specialists forecast that in 2010 the demand would reach 4.5 bln tons and do

not foresee a peak of production till that year.

The Middle East stays a neuralgic region of the world and a hermetically closed

area as far as foreign investments in the oil sector are concerned. Only Kuwait with

its resources of oil, its export and export of oil products, including petrochemical

ones, professionally administers the received benefits and manages its oil assets more

as a corporation than as a state, accumulating funds and investing in foreign enterprises.

Saudi Arabia made a decisive step, opening for foreign investments (Shell and Total)

the huge area of 200,000 km. 2 of desert for gas (not oil) exploration and production.

However, the Caspian oil raises hopes. All big oil concerns came back to Baku. The

yet larger deposits of Kazakhstan–currently exploited Tengiz and powerful Kashagan–

are going to play a serious role in the world in the next decade. All key international

corporations are present there. Recently, one could observe their objection against

Chinese firms’ entry into that market. Pipelines are a problem, because the existing

ones do not suffice. The construction of the basic pipeline through Turkey to the deep

harbour Ceyhan is in its initial stage. In 1996, they discovered “big oil” in the deep

waters in West Africa and in the deep waters of the Gulf; the latter discovery did not

arouse special optimism, even though a new drilling record, at the depth of almost

3000 m. from the ocean bottom, was established, thus improving Brazilian

achievements (the best so far). The technology of oil production has undergone essential

improvements. The method of horizontal drilling was introduced even on a dozen or

so kilometres. There are FPSO systems (Floating, Production, Storage, Offloading)

instead of immovable platforms, which, like the Norwegian Troll placed in May 1996,

that weighed 1 million tons and was 472 m. high, surpassed everything that man has

made in the world, even the Egyptian pyramids. So oil is produced not only in Africa

(Nigeria, Libya, Algeria, Gabon) but also in Egypt, Sudan, Chad, Equatorial Guinea,

in the tiny states of San Tome and Principe, in Morocco and in Angola (the “big oil”

discovered by Exxon in 1998). Alaska in North America may become open to

exploration under the energy bill which, despite the US engagement in Iraq, is

nowadays intensely and legislatively elaborated. Canada has new oil fields (Hibernia

and Terra Nova) near New Foundland. There are big deposits of heavy oils, shales

and sand. There have been new investments in the production of synthetic oil since

1997. There is already considerable production of synthetic crudes. Yet Venezuela has

larger resources of heavy oils, surpassing the current oil reserves in the world. In the

Orinoco Belt their deposits have been assessed at 170 bln tons. This country opened

itself to foreign investments in 1995 but recently, under Hugo Chavez’s presidency,

developmental projects have been moderated. Mexico, with its new president, can

attract foreign investments, however it requires constitutional amendments. Ecuador,

Colombia, Peru and Mexico are also oil countries. In 1997 the Petrobras’ (Petroleo

Brasileiro) monopoly was finished (by an act of law); it had lasted since 1953. Since

1991, Argentina has introduced liberalization of the oil industry. But there are not

significant resources of oil there–Brazil is a net importer of oil and gas. Argentina has

97


Tustanowice (Poland’s former

border land); a general view

of the oil field;

Oil City–the biggest oil rig;

a postcard printed

by Leon Rosenschein

in Drohobycz in 1903

(phototypography).

surpluses of gas. Oil fever, which spread across the Falkland Islands in 1995, was

gone after ineffective drillings. In 1996, similar hopes turned out futile in Greenland.

China produces much, yet its demand is bigger than its own supplies and it is still

growing fast. Since 1992, this country has been a net importer of oil. Norway, not

long ago being the second producer, now the third largest exporter of oil in the

world, following the pattern of some Arab countries, manages an impressive oil fund.

There are many changes in the North Sea–for example, the ENI concern bought

assets from Fortum, and BP sold its legendary oil field the Forties. The British press

deliberates that its oil supplies are almost “dry.” Instead, in 1996 the largest oil

deposit in the western part of the European continent–in Italy, in the region Val

d’Agri–was discovered. German companies, which possessed rather small resources

and production, have recently sold them–Preussag to OMV (Oestrreichische

Minaraloelverwaltung) in New Zealand and Deminex to PetroCanada.

New quality of fuels and other environmental challenges

On October 1, 1993, the USA, on the basis of CAAA (Clean Air Act Amendment),

introduced gas oil including maximum 500 ppm (ppm–part per million=0.0001%)

of sulphur. And 3 years later, on October 1, 1996, the same law was in force in the

European Union. On January 1, 1995, the USA implemented the first stage of using

RFG gasoline (RFG–Reformulated Gasoline), containing oxygen compounds

(oxygenates). These changes in quality are based on research–in the USA on the

programme AQIRP (Air Quality Improvement Research Programme), in the European

Union on the programme Auto Oil (1995). These programmes proved the

contamination of many urban areas with nitrogen oxides emissions and volatile organic

compounds which together set up photochemical smog; they also proved high releases

of particulates from vehicles, particularly from compression-ignition engines. These

changes turned out insufficient and in 1997 there was a decision to do additional

research–the Auto Oil II Project. Further reduction of the content of sulphur

compounds (until the achievement of low sulphur fuels and tightening of other

parameters of fuels quality) was implemented very quickly (Directive 98/70/EC and

its amendments–2003/17/EC). This is also postulated by the World Wide Fuel Charter

from 2002. For refineries it means the necessity of bearing serious investments which

are very expensive–the alternative is to go out of business. Here is a list of international

legal acts and projects which set very high requirements with regard to emissions and

atmosphere purity: the so called Montreal Protocol, prohibition of production and

use of chlorinated and fluorinated hydrocarbons in the European Union since 1995,

the Kyoto Protocol on the reduction of greenhouse gases emission (1997), a directive

from 2001 restricting the release of acid gases (sulphur and nitrogen oxides) by large

power engineering facilities–LCCP (Large Carbon Combustion Plants), and the

programme “clean air for Europe”–CAFE or acts on protection of water and soil. All

these legislative measures make up severe requirements and big challenges for oil

companies. The refineries of tomorrow must certainly be much more expensive. There

will be limits of greenhouse gases emissions GHG for companies and trading them

will meau something like an additional tax (Poland approved of the obligation of 6%

reduction of such emissions). Other fuels, the so called alternative ones, became a

serious subject of political debates. Biofuels make up such a challenge that they are

more and more widely discussed and introduced onto the US market in large quantities

(in the form of ethanol) and in Europe (tert-buthyl ether from ethanol, ETBE, and

biodiesel); the same goes for the recommendations of the Directive 2003/30/EC.

USA and Europe execute large R&D projects dealing with the applying of hydrogen

in fuel cells–the idea which has been well-known since 1839. The first economy in

the world based on hydrogen energy is to be introduced in Iceland. Hydrogen gas

station were opened there. Several European cities implemented pilotage programme

with such drives for city bus fleets. Also, hybrid vehicles are quite popular–cars powered

99


Tustanowice (Poland’s former

border land); a fire of the biggest

oil rig Oil City; a postcard

printed by Leon Rosenschein

in Drohobycz

in 1908 and mailed in 1915

(varnished phototypography).

by conventional fuel and electric current. Those examples are enough, not to mention

new designs of engines which also may require other fuel specifications.

Contemporary times–the Third Republic of Poland

The years immediately preceding the political changes in Poland and Eastern

Europe were a period of general economic breakdown for our country. The sale of oil

products for private car owners had already been under control for many years. The

unreal prices, lack of goods, growing hyperinflation and the lack of foreign currency

haunted the country, like the proverbial 7 Egyptian plagues.

The first years of the III Republic, since 1989, brought many changes but the so

called payment hold-ups (delayed payments), high exchange rate of the dollar, high

inflation and high interest on credits did not mean normality. Foreign entities and

private entrepreneurs entered the market.

After 1993, on the basis of amended law, foreign companies could also explore

oil and gas in Poland. In 1996, PGNiG (Polish Oil and Gas Exploration Company)

discovered oil fields in the BMB region–Bamówko-Mostno-Buszewo–with 7 bln m. 3

of gas and 10 million tons of oil for recovery. There maybe twice as much oil near

Gorzów. The oil field Midzychód contains 6 million tons of condensate and 36 bln m. 3

of gas. The Petrobaltic company produces significant quantities of oil from the Polish

shelf of the Baltic Sea. Totally there are 13.6 mln tons of oil, including 12.5 million in

the Polish Lowland and 157.4 bln m. 3 of gas. Specialists forecast that in the period

2005-2020 it will be possible to discover 2-5 million tons of oil and an additional

10% from the foreign concessions in Poland. Table 26 presents the current petroleum

production in Poland.

In 2001, professional literature claimed the world supplies of 141 bln tons of oil

and production of 3.19 bln, whereas in Poland those figures are 15 million tons and

0.85 million tons respectively.

Completely different data about oil in Poland are taken from a different source

(J. Siewierski, wiat Paliw [The world of Fuels] No. 6(24) November-December 2002,

p. 6-10)–Table 27. Data for 2002 here and in the next tables from the same source

make up only an estimate. Table 28 shows import of oils.

After an initial period of diversification of oil exporters, among others, to reduce

sulphur dioxide from the PKN ORLEN’s heat and power generating plant, when the

Russian oil made up only 80% of imported oil, we came back to processing Russian

oil almost exclusively–already in 2000 it was 93%, in 2001 95%, and in 2002 the

pipeline Friendship transported 95.5% of imported oil. Presently, Russia is an important

stabilizer of the world oil market, second exporter after Saudi Arabia. Its export has

been incessantly growing since 1994 and the pipeline Friendship makes up the main

route of transportation. Table 29 presents average annual oil world prices. The influence

of oil prices on the world economy has often been much discussed. Though the world

economy has became less sensitive to “oil shocks” which caused world crises in 1973

and 1979-1980, it is estimated that the growth of the oil price by $10/bbl can reduce

the world gross product by about 0.5%! The Polish economy, being insufficiently

effective with regard to GDP per capita, may be much more susceptible to such changes.

In the period of constitutional transformation, refineries had to change their

strategies–generally into pro-market policy oriented towards the customer and profit.

The Gdask Refinery Works quickly became a one-man partnership of the State

Treasury (a kind of private enterprise during the transition period). That company

began to import oil and fuels on its own as well as it entered the retail market. The

Mazovian Refinery and Petrochemical Works in Pock (MZRiP) entered the same

trend somewhat later. Earlier it had completed some new projects–in 1991 the

production plant of methyl-tert-buthyl ether (MTBE) was started up basing only on

Pock solutions and the design which was developed by OBR–Orodek Badawczo

Rozwojowy [R&D Center] and ZBP–Zakadowe Biuro Projektów [Company’s

101


Kamionna near Bochnia–Maria

oil rig; a postcard printed

by Wadysaw Gargul

in Bochnia, mailed in 1909

(phototypography).

Krosno–an oil field; a postcard

printed in 1939 by M. Monheit

in Krosno (reprint by

Wydawnictwo Salonu Malarzy

Polskich in Cracow)–one colour

print.

Engineering Office]. In order to revamp the polypropylene units, they implemented a

prototype, unsuccessful, foreign know-how pelleting system which was later adapted

for compounded polymers. Then hydrodesulphurisation of the gas oil (HON V)

plant was completed also on the basis of the aforesaid engineering. In 1990, a

contract on imported reforming of naphtha with continuous regeneration of the

catalyst was a precedent (Refroming V). At that time, in order to get profitable

foreign credit without a government guarantee, like the German one established

for GDR (German Democratic Republic) in Kreditanstalt fuer Wiederaufbau,

bordered on a miracle, because neither indebted Poland nor its enterprises had

creditworthiness–the world agencies like Standard & Poor’s, Moody’s or Fitch IBCA

had not set a rating for us yet. Here it is worth remembering that thanks to the

then management’s decisiveness and persistance, the project was completed in spite

of its being questioned by the Najwysza Izba Kontroli [Supreme Control Authority]

and some political forces.

Numerous contacts with the world technology in the whole history of the refinery

in Pock favoured the staff’s growth of skills. Technical progress developed itself and

the staff was innovative. About 100 units and 100 products entered the market along

with over 2000 factories. The following units were revamped: CDU, HON, phenol,

polypropylene, ether and olefins. The design loads of cracking and hydrocracking as

well as water deionisation units were exceeded. Several units were upgraded. New

products were introduced to the production schedule–new petrols, gas oils, jet fuel,

basic lube oils, bitumens, o-xylene, solvents, polymers, bi-axially oriented

polypropylene film, new techniques in maintenance departments and computerization.

Much was done due to the establishment of the national R&D institutions, especially

OBR in Pock, which was founded at the beginning of 1972. Environmental protection

became a motor of changes. Culture and sport could be developed.

The refinery industry in the III Republic faced completely new challenges. Beside

economic objectives, environmental protection became an object of the highest concern

and inspiration for undertaken actions. In the 1990’s in Pock, a two billion dollars’

investment programme was executed which included hydrocracking of distillates,

hydrocracking of residues, a hydrogen unit, hydrogen recovery, a network of gas and

new units of CDU, Reformings with continuous regeneration of the catalyst–the

mentioned V and a newer VI, hydrodesulphurisation of gas oils–V and a very modern

VI, isomerisation of light naphtha, an ether plant (now ETBE from ethanol); numerous

other units were revamped and expanded and the whole complex was modernized

and rehabilitated. It is as if an additional refinery had been built and revamped

thoroughly. Here is a list of undertakings, projects and programmes which compelled

the Pock complex to be a leader in its field: EU strategies of fighting acid gases

emission to prevent the pollution of air as well as acidification of the water and soil,

ozone strategy against tropospheric ozone, harmful for old people and children (this

ozone is in mundane cosset, do not confuse it with the stratospheric ozone which was

destroyed by the forbidden chlorinated had fluorinated hydrocarbons, forbidden by

the Montreal Convention for causing the so called “ozone hole”), and formation of

smog, global action following the Kyoto Protocol, hindering the climate change,

keeping the standards of imission recommended by the World Health Organization,

results of audit programmes Auto Oil I and II, standards of exhaust gas emitted by

cars Euro 3, 4, 5, World Wide Fuel Charter, a packet of EU directives “Clean Air For

Europe” (CAFE), requirements to use the best pro-ecological technologies and the

action Responsible Care or requirements of ISO standards 9000 and 14,000. We

must also diligently follow new emerging and announced technologies of car

manufacturers: SIDI–Spark Ignition Direct Injection, CAI–Compressed Auto Ignition

in gasoline motors, HCCI–Homogeneous Combustion Compression Ignition in Diesel

engines, low sulphur fuels to be obligatory from 2009, upgrading additives, hybrid drives,

alternative fuels including biofuels and hydrogen in fuel cells, also for vehicles, etc. Here

103


Krosno region oil-field–Ignacy

oil rig; a postcard printed

by Towarzystwo Szkoy Ludowej

in Krosno in 1938, printed

in the St. Wojciech Printing

House in Pozna.

Krosno–an oil field;

an unknown author’s postcard

printed in 1935.

Kryg near Gorlice–oil fields;

a postcard printed

by H. Nebenzahl in Gorlice

in 1900 on the basis of A. Müller

(phototypography).

is a list of dates illustrating the heroic strive for the implementation of new oil

products in Poland:

1991 • the production of Eurosuper 95 petrol (in 1994 it was awarded a prize Teraz

Polska [Now Poland]);

1992 • the reduction of lead content in petrol to 0.15 g/l;

• the production of jet fuel according to international standards Jet A l instead

of PSM-2;

1993 • the production of light fuel oil Ekoterm;

1994 • the production of leaded petrol 94A with reduced lead content to 0.12 g/l

with addition of alcohol;

• the production of premium gasoline Super Plus 98;

• the production of Ekodiesel–gas oil of 0.2% sulphur content;

• the production of city almost sulphurless gas oil (in 1996 a prize: Now

Poland, in 1997, “Leader of the Polish ecology” prize);

1995 • the production of unleaded universal petrol U-95 at CPN;

1998 • the production of Ekodiesel Plus gas oil with the content of 0.05% of sulphur;

• the production of light fuel oil Ekoterm Plus with the content up to 0.2% of

sulphur;

1999 • Polish Standards became identical with European EN 228 for petrols and

EN 590 for gas oils;

2000 • from 2003 fuels meet EU standards and quality, the end of production of

leaded petrol, Ekodiesel Plus 50 gas oil fulfils EU quality requirements which

were to be achieved in 2005 with maximum content of 0.005% of sulphur (in

November 2001, distinction in the III edition of the contest called “The

European Medal” by the Committee of European Integration and the Polish

Business Centre Club), the new version of city gas oil ONM “Standard 25”

(Grand Prix of the V International Fair “Oil and Gas 2000,” a prize “Golden

Wheels of the Municipal Transport” in September 2001, at the Exhibition of

Municipal Transport during the International ódz Fair).

In 1999 CPN merged with Pock Petrochemia SA and thus Polski Koncern

Naftowy–PKN [Polish Oil Company] was established. The same year, this new

company entered the Warsaw Stock Exchange. In terms of Polish circumstances,

PKN is a leading concern but in the oil world it is not large. It has no upstream which

is the main source of profits, often more profitable by the order of magnitude for the

same oil quantity. Fortunately there is petrochemistry which increases added value

processing of about 8% oil, which is above the world’s average. There is a majority

share in Anwil Wocawek and together with this company PKN ORLEN produces

over 50% of plastics. There is an agreement with Basell Holding and we began a

project to significantly increase the production of polyolefins. The refinery complex

in Pock is one of the leading ones–it ranks among the 10 largest refineries on the list

of 100 EU refineries, so called supersites, and is one of the most complex ones. In its

Capital Group, it has shares in Gdask Naftoport (oil harbour), IKS Solino storing oil

and fuels in its caverns. ORLEN has also expanded the grid of filling stations in

Germany.

Table 30 presents the production of motor petrols and gas oils in Poland. Recently,

there has been a break down in the increase trend which is confirmed by the drop of

car sales. In Poland, despite quite a descent number of passenger cars, with even a

lower number in comparison to our southern neighbours, the situation is far from the

western standards–there is still a big potential for growth. At the turn of the centuries,

we withdrew leaded petrol but, on the other hand, some low grade products appeared

on the market. Gas oils also have strongly diverse quality, especially with regard to

sulphur content–apart from products of the highest world class with 50 ppm of sulphur.

There are also products of larger but admissible content of sulphur. Table 31 shows

the sale of such products and their import.

105


Marcinkowice near Jaso–an oil

field; a postcard of 1910 printed

by Karol Schwidernoch in Vienna

(phototypography).

Rogi near Krosno–an oil field;

a postcard of 1910 printed by

L. Majewski–a photographer in

Tarnów and Iwonicz

(coloured phototypography).

The home market, after the liberation of prices in 1997 and the later annulment

of customs duties, became a competitive market with 1968 filling stations run by

PKN ORLEN SA and with 302 filling stations belonging to the Gdask refinery, 276

BP’s stations with the grid of German Aral, 210 stations of the Norwegian Statoil

with the Swedish Preem taken over, 205 Shell’s stations with the German DEA taken

over, 51 Jet stations belonging to ConocoPhillips, 38 Esso stations of ExxonMobil

and 27 stations of Neste, the Finnish Fortum concern, as well as a large number of

private and independent petrol stations. The Polish market also presents a very dynamic

growth of consumption of relatively cheap, low excised autogas: propane-butane

LPG. In 2000 Poland almost set the European record of LPG volume, equal to 1.175

mln tons, and, in 2001, 1.39 million tons, from the import of 0.877 and 1.127

respectively, including Autogas of 0.55 and 0.7 million tons respectively! The market

of gas oil is similarly misshapen by “the black economy” and illegal use of light fuel

oil to drive Diesel engines. In spite of several attempts, in fact, there is no monitoring

of the market through the effective quality controls and inspections, although directive

EU 98/70/EC as well as 2003/17/EC oblige to effective monitoring and quality control.

In the case of the southern refineries, still processing oil thanks to fiscal privileges, the

moment of truth slowly approaches–they start looking for market niches. The

investment plans undertaken in the refineries of Gorlice, Jedlicze and Trzebinia seem

to confirm the choice of the proper option. Still unfinished or not even started

privatization processes impede the situation of the whole sector. The situation of

completely “dicky” market is overlapped with a recently passed act on biofuels with

its unprecedented compulsion of using components of agricultural origin, bioetanol

and biodiesel, which are more expensive than those of oil origin; the are used in

considerable quantities which is a rear precedent in the civilized world. In view of this

difficult market and being confronted with dishonest practices of various entities, the

Polish refineries are more and more interested in export–vide Table 32.

In the national market for 3 quarters of 2002, PKN ORLEN presents better

results than the remaining refineries in oil processing and production of fuels. Here

are its shares on the home market: 75.9% in oil import, 71.0% in oil processing,

73.8% in production of motor petrol, 70.6% in production of gas oil, 72.7% in

production of light fuel oil, 74.4% in the sale of petrols excluding import, 68.2% in

the sale of gas oil excluding import and 72.0% in the sale of light fuel oil, also without

import. In addition, it is, as was mentioned before, the only manufacturer of

petrochemicals in Poland, also with a strong position on the national market in lube

oils, bitumens and solvents. PKN ORLEN SA is present on the stock exchange. The

company publishes more detailed data which are generally accessible and this is why

it exempts the chronicler from the duty of going into details.

The most recent years...

It is worth tracing the most recent years for our orientation on how complex and

quickly changing is the world in which we live and how difficult it is to find a stately

place in it.

The processing capacities of refineries from 1 bln tons in 1950, 4 bln tons in

1980, 3.6 bln tons in 1986 reach up to 4.1 bln tons at present, i.e. 10 times more

than in 1939! The world demand for oil is to grow 1.6% annually, according to IEA

prognoses–up to 89 million bbl/d in 2010, oil is to cost $21/bbl and refinery capacities

are to grow about 1.3% per year. Many companies quit downstream activities.

Potentially, the strongest oil organization–OPEC–has only 10% of the world refinery

capacities, but, on the other hand, as much as 40% of the oil market and 77% of the

oil resources. In 1995, the world petrochemical industry produced 175 million tons

of basic products, including 65% of olefins, 21% of aromatics and 14% of methanol.

There is an expected amount of 275 million tons to be processed in 2005. Ethylene

production capacities exceeded 100 million t/y long ago. Europe has the strongest

107


Rogi near Krosno–an oil field;

a postcard printed in 1910

by Bernard Fischbein in Krosno

(phototypography).

chemical industry but does not have many so called comparative advantages coming,

for example, from the possession of cheap feedstock base for its development. Europe

produces 40 million t/y of plastics, similarly to the USA, and has 1/4 of the world

production. In the USA an unusual plant was started up–BASF (Badische Anilin und

Soda-Fabrik) Fina in Port Arthur with 817,000 t/y of ethylene and 884,000 t/y of

propylene, with the process of metathesis to increase the output of the latter. The

Canadians, who enjoy superb conditions for this industry development built a plant

of 900,000 t/y of ethylene in Joffre and this is the largest centre with 2.5 million t/y

of this product in the world. South Korea, which within three decades built a refinery

industry from almost zero to 122 million t/y, was ranked sixth in 1997 in the world

with its refinery Yukong of 40.5 million t/y being the largest in the world until recently.

In the 1970’s, South Korea made petrochemistry their national industry and it is the

fifth in the production of ethylene in the world. However, nowadays that country is

not able to keep pace with the new conditions of business. New powers appeared–

Singapore became the regional centre of that industry. Other countries of that region,

especially China, develop quickly and after joining WTO they got development stimuli.

However, the greatest development of petrochemistry is in the Middle East. In 2003

the leading petrochemical company of that region, SABIC (Saudi Arabian Basic

Industries Company), bought the petrochemical part of the Dutch DSM (Dutch Staats

Mijnen), having its assets also in Germany. In Europe there appeared a South African

Sasol, a company established in 1950, being the only company in the world operating

Fischer-Tropsch technology and the present renaissance of that process opens

perspectives for the excellent GTL (Gas-to-Liquids) fuels for that company. Sasol

purchased German Condea. In 1996, Exxon and UCC founded a joint enterprise in

the polythene process called Unipol. In fact, there is a true race of great firms in R&D

on new catalysts for polymerisation of ethylene. Many companies look for chances in

building petrochemistry because the recent optimistic forecasts assumed the rate of

growth of refinery production on the average of 2% annually, and the petrochemical

production–of 5% annually (though today it is not true) because petrochemistry

develops more quickly than the refinery business. Petrochemical companies began

the process of mergers as the first ones. In 1995, a company Borealis was established

with Statoil and Neste assets (today there is OMV instead of Neste) as well as Montell

which later was to become in 100% the property of Shell, the ancestor of Basell,

which was founded from the joint assets of Montell, Elenac and Targor, the latter two

the property of BASF.

...in Central Europe

In 1997 the plans to expand the petrochemical works in Litvinov, belonging to

Unipetrol in the Czech Republic and TVK (Tisza Vegyi Plant) in Hungary started to

by developed. The same year, Dow Chemical solemnly and finally overtook Boehlen,

just off the Polish border. In 1999, it merged with Union Carbide Corp. (UCC) and

probably became the most global petrochemical concern. Transformations in the

Eastern and Central European countries from the beginning of the 1990’s were an

obvious consequence of constitutional changes. The establishment of the company

MOL (Magyar Olaj Gazipari Rt.) in Hungary, its privatization in 1995 and investments

in upstream and downstream as, in 1998 in the process of coking for the refinery

Duna DKV, reduction of costs and outsourcing e.g., accountancy outside of MOL

head office, its taking over of a part of petrochemical industry (TVK), later in 1999 of

Slovnaft (now owned in 70%), whose bonds were taken over by employees in 1995,

and investments of about 500 million USD–these are visible signs of modern strategy

of oil companies of this region. Restructuring of oil industry in the Czech Republic,

started in 1993, was completed in 1996 with taking over of 49% of Ceska Rafinerska

by Agip, Conoco and Shell. These investments caused, among others, the start-up of

fluidal catalytic cracking plant in Kralupy under UOP license. Even in Slovenia, which

109


Rogi near Krosno–an oil field;

a postcard of 1910 by an

unknown author with a mistaken

caption “Równe”

(phototypography).

Zboiska near Krosno; a postcard

printed in 1900 by J. Wein

(phototypography).

has a refinery in Lendava of only 0.5 million t/y, in 1995 a company Petrol was

privatized. The Romanian oil industry, beside Lukoil, was entered by OMV, which

recently has bought Rompetrol, the oil company second in size. OMV also holds

about 10% of MOL shares. In this part of Europe the Turkish companies Petkim and

Tupras were taken over as well as Greek Hellenic Petroleum, the quick expansion of

which “swallowed” the Macedonian refinery OKTA, and filling stations in Montenegro

and on Cyprus. The Croatian INA (Industrija Nafte) was entered by MOL. And what

about the Gdask Refinery and its capital group “LOTOS?” What about PKN ORLEN

SA? Time is running fast and we may not keep pace with the world...

...and the rest of Europe

In countries where the oil industry reached maturity long ago, one could observe

how much brand names matter; at the same time, independent gas stations were

going bankrupt. In Great Britain in 1995-1997, there was a price war and many

independent stations disappeared. In the European Union in 1997 malls had only

4.8% of the petrol shares but with regard to sales, it was 14.8%, which was more

than any oil concern. In France, it was a total of 48.9% and in Great Britain 22%!

Thus, nearby refineries merged for the optimization of their production sale–like, for

example, refineries Esso and OMW (Oberrheinische Mineraloelwerke) in Karlsruhe

with the Bavarian refineries Ingolstadt and Vohburg in Bayernoil in 1997, or in 1999

refineries Agip, Erg Augusta and Priolo on Sicily. In 1998, Shell and Statoil traded

parts of their assets of the super-refinery Pernis, which had been expanded to the sum

of $2 bln in the last years of the 20 th c.; the same was true about the most recently

erected refinery in Europe (not taking into account the refinery Mider Leuna,

constructed in 1997 on the streugth not too “clean,” political French-German

relations), the one in Mongstad which has a residue coking. Since 1997 it has been

operating a rare RCC facility (Residue Catalytic Cracking) of 2 million t/y. In 2001

Statoil was privatized as one of the last oil companies in Europe, though in the past it

often acted as a private company, growing and expanding its operations beyond

Norway, investing in upstream in many places of the globe, in downstream in our

part of Europe and buying, for example, a number of petrol stations in Ireland. The

only refinery in Ireland was taken over by a large independent concern Tosco from

the USA, which, in turn, was taken over by Phillips Petroleum. In 1999, Conoco was

sold by DuPont on the stock exchange. In 2000, Phillips sold its petrochemical business

to Chevron and then it itself merged with Conoco. All these examples are specially

listed here to show the exceptional tempo and the variety of changes in this difficult

oil world, looking for new development chances. Foreign capital began to flow to

refineries in Europe: the refinery Goeteborg, long ago called OK Petroleum and then

Preem (well-known in Poland but non existent now), was taken over by an Arab oil

concern in 1994. In 1996 the Kuwaiti KPC (Kuwait Petroleum Company), well

known in many countries of Europe for its Q8 stations grid, bought 50% of the

refinery Milazzo. Saudi Aramco bought 50% of Motor Oil Hellas in Corinth and 600

Avin stations in Greece. The investment fund from Abu Dhabi is in OMV. Earlier in

Europe, there were Lybian Tamoil and Holborn, etc. which were bought out. A private

company Petroplus was expanding; since 1998, it had been buying refineries in

Holland, Switzerland and Wales as well as terminals and pipelines in France. In 1995,

Neste started selling its bonds. This company, one of the best in Europe, is famous for

superb quality fuels from its refineries. It is perhaps the first company in posttransformation

Poland which in 1997 started up the first plant in Europe in Porvoo

on Chevron licence of 50,000 t/y of lube oils with extra high viscosity indexes. These

lube oils are not of Group I or II but of the third Group, which is the highest for

mineral oils, comparable with synthetic poly alfa olefins oils of Group IV. And it is

this company which suddenly altered its strategy, quitting upstream on the North

Sea, and since 1998 has established Fortum conglomerate with the Finnish electric

111


An oil rig in Stryj (Poland’s

former border land), a postcard

printed in 1898

(chromolithography).

Stryj (Poland’s former border

land), a factory of drilling

machines; a postcard printed by

Karol Schwidernoch in Vienna

in 1900 (chromolitography).

power company. It is not the first case in the history of changes in the company

profile. The pride of the British crown for 70 years–ICI concern–having quit

petrochemistry and other sections of chemistry and having taken to life sciences found

itself in a lousy position. After similar change in the Hoechst company–one of the top

three chemical companies in Germany and the world–this company (now called

Aventis) is more succssful. Not only oil companies face bad fate but also the wellknown

engineering company (also in Poland) ABB (ASEA Brown Boveri), for many

years recognized as one of the best managed companies, struggles for survival.

Great manoeuvres were observed in big oil concerns in the middle of the 1990’s

and a notion of “financial engineering” was created. A report published in the USA in

1998 showed that as many as 12 out of 16 great American companies in the field of

downstream “destroyed the value.” Value creation for company shareholders is a

business canon in the Anglo-Saxon culture. It is different from previous Japanese

philosophy oriented on the unity of employees and the company, or from the European

approach which is in-between in that it takes into account social matters, especially

the local ones. The “third road,” as in Johnson & Johnson, with gradation of validity

from customer through partners and suppliers, workers, commune up to shareholders,

also does not seem to assure success in the 21 st century.

Mergers of great entities

Mergers and acquisitions, alliances, taking over–all these processes have intensified

enormously. In the period 1996-2000, the value of such transactions in the oil industry

was about 500 bln USD, which was more than in the past 95 years of the previous

century!

BP’s spectacular merger with Amoco in 1998 began apparently a new era in the

world of oil. BP survived difficult years of 1992-1995–its splendid history started

from Iran, Iraq, Kuwait through Libya, Algeria, the North Sea, the USA, Alaska,

now Russia, the Caspian Sea and China–and after that merger plus having taken over

Arco and Castrol, and recently Aral and VEBA from Germany and being very strong

there, became one of the biggest oil concerns in the world with the market capitalization

usually close to $200 bln! It is worth mentioning that it is BP which applied NIR

(Near Infrared) technology of petrol blending as the first company in the world (the

technology was also implemented in Pock) and in 1997 it joined its patent rights

with the American company Ashland (now Marathon Ashland).

The merger of Exxon and Mobil just after that (also in 1998) established a still

more powerful oil giant–concern No. 1 in the world, with its market capitalization

sometimes exceeding $300 bln! These are among the biggest successors of Standard

Oil, from another epoch. Before that, Mobil tried to merge its European assets with

BP but this adventure did not last too long. Apart from exceptional successes in its

glorious history (for example joint-venture with Shell in 1996 called Infineum), Exxon

also experienced less praiseworthy moments, e.g. when, in 1952 the authorities

conducted an investigation of IG Farben’s business relations and the division of markets

in 1924. The concern was punished for the famous catastrophe of the tanker Exxon

Valdez in Alaska. That accident even nowadays is the reason for opponents to protest

against further exploration there. In Canada, there is a strong company which is

Imperial Oil, a branch of Exxon.

Shell, one of the great three concerns, ranking alongside BP, had not made such

great acquisitions. However, since 1997 it has been present together with Texaco in

the US refineries. Now it has taken over shares of Texaco, it also took over the largest

independent British firm in the North Sea, Enterprise Oil. In Germany in 2001, it

took over the assets of RWE DEA. It is probably the most global company in the oil

sector. It is particularly strong, among others, in Nigeria through the alliance with

NNPC (Nigerian National Petroleum Company) and in Australia, thanks to its shares

in the largest independent company Woodside, let alone the USA. Shell company has

113


A stock worth 1000 Polish marks

issued by Zachodnio-Maopolska

Akcyjna Spóka Naftowa

i Gazowa in Cracow in 1923;

printed by Piller-Neumann in

Lvov (litography).

also had same shameful moments in its history, e.g. pro-Nazi sympathies of its then

President and violation of human rights in Nigeria.

The fourth power, approximately half as big as the companies of “the great

three,” is French-Belgian Total, which was the result of the merger of French Total,

CFP’s heir, with Belgian Fina in 1998, and taking over of the French Elf Aquitaine in

1999. That is the biggest company in Europe, and as far as its refinery capacities are

concerned, absolutely predominant in France. Total holds shares in the Spanish CEPSA

(Compana Espanola del Petroleo SA) which is the second in this country after Repsol.

It is also present in the Lindsay refinery in England.

The joint Chevron and Texaco Companies (2001), with comparatively

underrepresented in Europe, compete with Total and ENI for leadership. Phillips

along with Conoco are also close to this hierarchy. The merger of the Russian concerns

Yukos and Sibnieft could set up a giant with even larger resources than those of

Chevron Texaco.

In 1996, the Italian ENI entered the stock exchange. Before that, it survived the

period of marriage and divorce with Montedison after the event ful history of its

petrochemical daughter-company EniChem. Great fusions turned out unsuccessful

for this company though it has strong relationships with Russia and the Caspian

region. It purchased a lot of assets in the North Sea including a big independent

British company, Lasmo. It also entered the Portugese market merging with the power

engineering firm Gulp, which was established there as a result of restructurization in

1998, taking up, among others, the refinery company Petrogal.

Repsol completes the review of great firms; it came into being as a result of

transformation in Spain, as a predominant entity, at the end of the 1980’s. Repsol

quickly crossed country borders. In 1996, it first bought Astra in Argentina and then

in 1999 the greatest company there–YPF (Yacimientos Petroleos Fiscales). After the

economical crisis in Argentine, Repsol YPF suffered hard times but it certainly will

survive this crisis.

The Norwegian Statoil is a strong company that represents everything which, in

the last 30 years of the Norwegian oil history, was achieved. Here also is a significant

firm called Norsk Hydro, which took over a part of the assets of Saga Petroleum.

However, it is not these companies but the state molochs from OPEC countries

with gigantic resources of oil as well as underappreciated Russian oil concerns which

are the potential oil giants. In 2000, three Chinese oil firms entered the stock exchange

and immediately PetroChina, Sinopec and CNOOC (China National Offshore Oil

Company) joined the team of the greatest energy concerns of the world.

The world after a hundred years–where is it heading for?

The world has changed much during the last hundred years–the British Empire

was at the peak of its power a hundred years ago. During that time the US GNP per

capita grew 5 times, even in India it rose twice, including inflation. At that time

Germany was a threat towards Great Britain, now China with its unparalleled speed

of economic growth seems to threaten the US power. Only seemingly nothing has

changed–the 10 richest countries are still the same ones, only the USA went ahead

while Russia fell back. Oil, which these two countries have always had in abundant

resources, served them so differently! The energy sector is an avant-garde of

globalization. Globalization is an irreversible process because it reduces costs.

Meanwhile, the fall of Enron and the scandals connected with it question the confidence

towards the ethical side of the operations of great concerns, which is an indispensable

factor in the globalization process. A new paradigm of big concerns’ operation is

being discussed. Investors often see only half of companies’ value at stock exchanges

but the unmesureable elements, such as their culture of workmanship and operation,

leadership, innovativeness, quality and strategy execution are not seen. Sustainable

development is vital. The European Union wants to be the most broad-minded and

115


Polanka (Krosno)–a palace built

in 1808, a seat of general

manager of an oil company

“Maopolska” in Lvov; an

unknown author’s photography

made in 1930.

Polanka (Krosno)–a dining room

in the palace belonging

to general manager of

an oil company “Maopolska”

in Lvov; an unknown author’s

photography made in 1930.

Polanka (Krosno)–a building of

the head office of the oil

company “Maopolska–West

Branch Office;” an unknown

author’s photography

made in 1930.

liberal market in the world in order to be able to become an economic leader. Starting

from July 1, 2004, all institutional organizations and since July 1, 2007, all other

companies may enjoy an open EU energy market. It concerns gas and its enormous

resources, even without hydrates, as well as electric power. Already now, oligopolies

are being founded. The European Union is criticized for the weakness of its economic

policy. Its public debt has been growing for years and 50% of its GNP is spent on

public expenses. Its productiveness has fallen and the potential of economic growth

diminishes. In addition, there are loud calls with regard to the policy in favour of

renewable fuels against fossil ones. In 2001, the WEC (World Economic Congress) in

Davos argued that in the period 1950-1998 the world economy grew 6 times, export

of goods 19 times, and in spite of that in the world trade, which is worth 6800 bln

USD, only 1/4 of the world production was traded.

Several impressions–memento for the future

The fate of the world economy and individual countries depend on the secure

delivery of energy, especially crude oil, which was particularly clearly visible during the

so called oil shocks causing crises of the world economy. Fiscality lets states “suck”

huge money into the budget from excise duties and taxes. An oil company in today’s

market economy has to create value for stockholders, though in the past there were

several examples of ruining such a value. Production and investment plans must be

done for 10-20 years ahead in unforeseeable surroundings while investments are

expensive and any mistakes cost even more. This is why every bit of information must

be taken into account in the planning of a company’s strategy. While reading this

book, it is plainly seen that after a change of lighting technology from kerosene to an

electric bulb a possible scenario is likely to take place with conventional, fossil fuels:

hydrogen fuel cells driven vehicles are slowly going to replace fossil ones–already

nowadays there are such vehicles. Energy forecasts assume that this kind of energy

will become widely accessible after 2020. But it is easy to make a mistake–the prognosis

of the Roman Club is a good example when over a hundred famous scientists and

scholars of the world at the end of the 1960’s forecast that hydrocarbons resources

would run out soon and a complete twilight of the world oil industry would take

place. Another impression concerns biofuels. In Poland, they try to base that technology

on obsolete distilleries and the production of FAME (Fatty Acid Methyl Esters), due

to lack of capital, on small, thrifty entities. This reminds us of the aforesaid illusions

connected with the beginnings of the Polish oil industry. Again, history probably will

not teach us anything, as it used to happen, anyway.

Consolidation of companies is a characteristic phenomenon of our times. In the

oil and gas sector–which is worth repeating–the value of mergers, fusions, take overs,

canvassing, joint ventures etc. in the last 5 years of the 20 th century (1996-2000)

reached over 500 bln USD (as much as almost 3 years of the Polish GNP!) which is

more than throughout the previous 95 years! This “fashion” came from America.

Consolidated, great oil concerns, three of them with market capitalisation usually

over 200 bln USD, as well as a number of smaller companies, but with the value of

order of magnitude higher than PKN ORLEN’s 2 bln USD, as competitors have not

only theoretical superiority resulting from their financial power. Globalization is their

strategy. In the phenomenon of globalization its followers appeal to its conformity

with the man’s social nature. They present its advantages coming from the integration

of economies. Its opponents criticize the expansion of international capital and its

privileged use of fruits of the technological revolution in the world of unequal chances

and merciless competition. A powerful cartel of oil exporters grouped in OPEC which

is keeping, in the name of another ideology, the world economy in tight grip, provides

a different kind of data. Namely, within 40 years, the average GNP per capita of the

20 richest states, being 15 times higher than that of the 20 poorest states, underwent

duplication (“the rich become richer and the poor become poorer”). But according to

117


Polanka (Krosno)–employees of

the oil company

“Maopolska–West Branch

Office” in front of the head office;

an unknown author’s

photography made in 1930.

Polanka (Krosno)–a house of

office workers of the oil company

“Maopolska;” an unknown

author’s photography

made in 1930.

Polanka (Krosno)–a house

of manual workers of the oil

company “Maopolska;”

an unknown author’s

photography made in 1930.

economists, the only way to progress leads through globalization which will enfeeble

the role of national businesses; it will increase the role of international organizations

and cooperation, it will add an extra value of ethical dimension and will have to

awaken the feeling of ethics of global concerns. It is going to change the world and

create men’s new mentality. The president of the British Petroleum, Sir John Browne,

awarded with a noble title by the Queen, in one of his university lectures at Harvard

proved to the listeners the advantages of globalization, reminding them that during

the first half of the 20 th century the then 1 billion of the world divided population

could achieve only 1% growth of GNP per capita annually. During the second half of

the century, open world community of 3.5 bln or more doubled this result and increased

the world trade value by 1700%! It is probably unlikely to hold back or stop the

processes of the global integration and open cooperation. This is why we worry when

we look at the slow and still unfinished processes of the Polish oil sector transformation.

In contrast, the Hungarian oil concern MOL has been operating for over 10 years,

and has a wider base of operation with its upstream and majority of shares in the

Slovak refinery Slovnaft. In short-term, the concern’s strategy for 2005 assumes

EBIDTA profit of over 1 bln USD and an impressive coefficient of capital return

(ROACE) of 17%. Another regional player, the Austrian OMV, has recently acquired

licences for upstream (oil and gas) in Bulgaria, New Zealand, Pakistan and is arranging

the purchase of shares in two refineries in Romania. Theoreticians see in the oil industry

a so called “old economy” with declining importance and set it against quickly

developing “new tech” (telecommunication, media, IT). Oil is, however, still a basic

resource of the world energy–still 38% of the energy comes from oil, 25% from coal,

24% from natural gas and only less than 7% from hydropower and atomic power.

Thus, one cannot imagine the world without oil. The present history of oil runs fast.

It requires incessant follow-up actions and undertaking of appropriate actions for the

development and value incresing of such companies as PKN ORLEN SA. The world

of oil is somehow, and not in a small degree, shaped by politicians. Let us not get

offended–understanding of people’s needs, various dependences, tendencies, knowledge

of forecasts, applied fiscal regime, etc.–such education and training would turn out

advantageous and certainly not only for the Polish political class. History, also presented

in this short draft, quotes more than enough examples to prove this thesis. Thus, let

the Year of ukasiewicz become an opportunity to remind these old and well-known

truths; his words cited in the foreward, a kind of his testament, will then really have

a chance to come true.

We may look at the past with pride. There is documentary evidence of almost

400 Poles’ share in the development of the oil industry and spreading it to all parts of

the world. Among them there are outstanding persons, just to mention a few: Zygmunt

Bielski (1869-1944), Professor of Lvov Technical University and then the Academy of

Mining–in Iraq, the Czech Republic and Albania; Karol Bohdanowicz (1865-1947),

Professor of the Academy of Mining–in Iran, in the Ural Mountains and Siberia;

Edward Kiliski, Ph.D. (1899-1931), great grandson of John, the famous shoemaker,

who discovered the rich resources of oil in Edmonton, Canada; Pawe Potocki (?-1924)–

an outstanding expert in Baku, honoured with Lenin’s medal; five members of the

Rylski family–Baku multimillionaires till the revolution in 1917; Leon Syroczyski

(1844-1925), the January Uprising insurgent, Professor of Lvov Technical

University and its rector–active in the area beyond the Caucasus; Stanisaw Wyrobek

(1903-1979), who discovered gas and oil in the North Sea; Franciszek Zamoyski

(1877-1969), Member of Parliament, working in Caucasus region in Mexico; Witold

Zglenicki (1850-1904)–well-known in Baku; the Zuber family; Stanisaw Abamowicz

(1905-?), known in Polmin oil fields and a pilot in France and England (Wing 300),

and then a mayor in Australia; Micha Szopiak–in 1905 drilled the first oil well in

Ecuador; Hilary Ortyski (1907-1974)–in Turkey, in Algeria he found oil in Hassi

Messaoud, awarded with the the Legion of Honour; Jerzy Strzetelski (1874-1943)–

119


in Groznyi and Baku, a prisoner in 1917-1921, then in Albania, Greece, Italy, Romania,

working for Anglo-Persian successfully found oil in Iran, Iraq, Syria; Zdzisaw Tomasik

(1902-1970) a graduate from the Sorbonne, worked in Austria and Germany; Damian

Wandycz (1892-1974) a chemist and oil activist in Romania and London, since 1951

the director of the Józef Pisudski Institute in New York; Stanisaw Weigner (1886-

1935) a geologist in Colombia who worked for CFP; the Wieleyskis and many

others. They were everywhere...

BIBLIOGRAPHY

Historia, dzie dzisiejszy i perspektywy górnictwa naftowego w Polsce. 2003 Rok Ignacego ukasiewicza. Seminarium

i wystawa w Senacie RP 15 stycznia 2003, CD.

Koski Wiesaw, Pocka petrochemia 1960-1985, Mazowieckie Zakady Rafineryjne i Petrochemiczne, Pock

1986.

140 lat przemysu naftowego w Polsce – historia i perspektywy. Materiay z konferencji naukowo-technicznej,

Bóbrka, 20. 08. 1993.

Materiay z II Krajowego Zjazdu Branowego Przemysu Naftowego i Gazowniczego “ Nafta-Gaz ‘97, ”

Cracow 1997.

Nafta Gaz, 2001, vol. 12.

Naftowy Kurier Karpacki, 1993, vol. 12.

Remsberg Charles and Hal Higdon, Ideas for Rent–The UOP Story, UOP 1994.

Soaski Józef [ed.], Bóbrka – Naftowe dziedzictwo, Krosno 1996.

Wiek Nafty. Zeszyty naukowo-historyczne Muzeum Przemysu Naftowego i Gazowniczego im. Ignacego

ukasiewicza w Bóbrce, nr 1/93, 3/96, 2-4/2002.

Wolwowicz Ryszard [ed.], Historia polskiego przemysu naftowego, t. I i II, Brzozów–Cracow 1994, 1995.

Yergin Daniel, The Prize–The Epic Quest for Oil, Money & Power, Simon & Schuster, New York–London–

Toronto–Sydney–Tokyo–Singapore 1992.

Author’s own information, data and collections.

Krosno–fuel and lub oils supply

point of Polmin company during

a car rally

Warsaw-Lvov-Cracow-Warsaw;

a photo postcard by R. Kasko

from Krosno (1936).

Wisa (Cieszyn Silesia)–filling

station of “Karpaty”

company located by the health

resort house; a photo postcard

by Tadeusz Kubisz from Cieszyn

(1938).

121


IV. FROM THE MAZOVIAN REFINERY AND PETROCHEMICAL

WORKS TO POLSKI KONCERN NAFTOWY ORLEN SA

A rich though not very long history of one oil company

Certificate of location

of the Mazovian Refinery and

Petrochemical Works in Pock

(MZRiP) of February 25, 1960.

Opening ceremony of MZRiP

in 1964.

A good cause does not require many words

(old saying by an anonymous author)

Introduction

In this part of our draft of the history of the oil industry in the world and in

Poland, we have decided to present how crude oil arrived in Pock and how the work

of ukasiewicz found its crowning achievement in his motherland. The reasons already

described in the preface authorize us to special treatment of this ancestor’s history as

well as of today’s PKN ORLEN SA. The reader may find numerous mentions allowing

us to make direct comparisons of various human fates, events, acts or facts experienced

by us and others, yet, even risking repetitions here we shall write about MZRiP–

Mazowieckie Zakady Rafineryjne i Petrochemiczne in Pock, afterwards called

Petrochemia Pock SA [Petrochemical Works in Pock joint stock company] and finally

Polski Koncern Naftowy ORLEN SA. The author hopes that this short history of the

evolutionary transformations which has led to the establishment of the European

scale concern will induce readers to reflections and musing.

Reasons and beginnings, characteristic general features

The decision to construct the so called sixth refinery about 50 years ago was a

logical consequence of execution of industrialization doctrine which was promoted for

confrontational purposes against the hostile imperialism by helmsmen of the stateship in the

world conquered by confessors of new ideologies. The development of the Polish economy,

which was so much destroyed in the last war, required more and more energy and

fuels. Table 15 clearly shows, as was stressed in the proper place of part III, that in

1960 import already made up two thirds of the national demand for oil and its

products. In addition, the world had a new motor of development–petrochemistry,

which in Poland was then unknown and probably no one foresaw its unusual growth

at that time.

The choice of Pock for the location for this sixth refinery was made out of 10

sites as we wrote earlier in the book, referring to Wiesaw Koski’s monography

published by MZRiP. In the book by Mrs Alina Klocek, even fourteen localities are

mentioned, i.e. additionally Koo, Konin, Ostroka and Tczew–as well as the location

in the former German factory of synthetic petrol in Blachownia lska is discussed.

Most probably it is the scheduled route of the future oil pipeline which affected the

decision to select Pock. The study also cites the fact that the Soviet experts accepted

the location of the complex on the eastern side of the Vistula River. Apologists of

that undertaking found twelve reasons for that location. Here we can add as a

perverse thesis one more, the thirteenth reason: if Cracow got New Ironworks [Nowa

Huta], then Pock should also have its “cathedral of socialism,” with a strong centre

of the working-class. Social changes were the essential element of the internal policy,

anyway. In the previous parts of the book, formal decisions, dates of important

events as well as their heroes were mentioned. In this part of the book, we will not

come back to dates, names or numbers but instead we are going to focus on the

general presentation of rules and mechanisms as well as their reasons which have

led to the present state.

The construction of the refinery, ten years after the Cracow New Ironworks, of

equally great scope, meant much more advanced professionalism. Even today, after

four decades, among people accustomed to uninterrupted presence of building sites

at the Pock complex (maybe except nearly ten years in the 1980’s), that pioneer time

123


Central Workshops will soon

be built here.

Cracking I Unit.

of building arouses admiration and acknowledgement. Great challenges required

great men’s contribution. Especially Antoni Rogucki is a figure–symbol of those

unnamed heroes–a builder, the manager of Petrobudowa, who was responsible and

had the honour to found a production complex without precedence in the history of

our country.

Even today, the technological and engineering solutions introduced at that time

in Poland (reforming, cracking, coking) arouse respect. Though coking did not turn

out a success, it was not the originators’ fault, the real cause being imperfect technology.

The common use of coking in the USA, the USRR and Romania took and takes place

and the recent start up of such a unit at the main MOL refinery in Szazhalombatta

also proves that it was the right decision with regard to Pock. Special homage should

be paid to the chief project engineers’ accomplishments, to Mr Kazimierz Kachlik

(already mentioned as a veteran) and Ludwik Kossowicz, Ph.D., as people responsible

for the investment decisions in Pock.

The method of the Pock complex construction consisted in multiplication of

units, in adding next repeatable modules, which in consequence periodically caused

the presence of six (with some omissions) CDUs, reforming of naphtha,

hydrodesulphurisation of gas oils (HON), whereas two parallel units, as a rule being

of various generations, are found quite often. For example, Fluidal Catalytic Cracking,

FCC I, as well as the more modern FCC II, differed in the output efficiency of white

products, 72.5 and 87.5% respectively, including petrols 23.3 and 50.3%. Both plants

underwent several revamping operations which resulted in significant improvements.

The layout of production facilities, which were constructed as independent entities,

with their own control rooms, tanks and various auxiliary systems, was far from the

later concepts, especially with regard to energy consumption reduction during

operation. But from a safety point of view, losses were minimalized in case of failures.

It fully met the military requirements of assets security which is even nowadays

supported by insurance companies. This reasonable type of architecture of the refinery

and petrochemical complex, along with its self-sufficiency in supply in utilities, plus

the services needed for the complex, in consequence led to unusually complicated

industrial organism. Hence the task to optimise the operation of the complex became

extremely difficult which was experienced by KBC’s specialists, who have achieved a

rather moderate result. Another challenge was to obtain a low rate of employment, is

essential nowadays, as well as competitively low production costs which are possible

to attain, among others, thanks to outsourcing.

Appropriate certificates of location, establishment of the enterprise MZRiP under

construction and approval of the General Preliminary Engineering document by the

KERM resolution 419/60, were simultaneously followed by the passing of resolution

420/60 about the development of the Pock city infrastructure.

And thus, here, by the Vistula river, a well-known scenario of formation of a

large municipal agglomeration was repeated. The town-creating role of industry has

always interested demographers of the past epoch and eulogists of its glory. Pock

industrialization increased the number of town-dwellers in the period 1960-1970

from 42,798 to 72,336, i.e. by 69% which is the largest increase, if we consider the

list of 79 largest towns and cities in Poland. MZRiP’s construction was accompanied

with advantages as well as tensions caused by the insufficient meeting of people’s

needs. Animated liveliness of the city, numerous foreign visits, wide contacts with the

western world and modern technology were not to be ignored. On the other hand,

the complaints about the environmental pollution, or hidden tragedies caused by

health reasons, alerted the authorities and inhabitants.

The growth of demand for oil and its products was huge in the world and in

Poland, the economy was unsaturated, and this brought about the continuous

necessity of its development–it was always cheaper to invest here than expose a

poor country to bigger expenses in other virgin areas, which we call grass roots. It did

125


Phenol and Acetone Plants.

CDU I, 1965.

Head office is being erected.

not matter that under such policy–as the Anglo-Saxons say–“all eggs are in one

basket.” Let me repeat here the comparison of the oil consumption growth rate in

1948 and 1972–in Poland it grew 50 times and in Japan even more, 137 times! The

1970’s were to be a golden age for refineries but if they really were, they lasted very

briefly. The famous “programme of preference of the chemical industry in the national

economy,” i.e. assuming a serious growth of production of olefins, aromatics, ethylene

oxide, glycols, butadiene, plastics, synthetic fibres, rubber as well as other chemical

products for agriculture, food industry, building industry, health system and other

needs, finally was not executed. The world events and the political requirements

concerning the shortcomings of the economy which was resistant to central planners’

commands quickly ordered the authorities to introduce an “economic manoeuvre,”

coupons system for basic life products and, finally, the nightmare of martial law.

Thus, it practically led to the bankruptcy of “the great ideas of socialism.” However,

a few relicts of the said programme have survived–Olefins II as well as ethylene

oxide and glycol II plants. Thus the Polish People’s Republic, in short, contributed

to the first thirty years of the history of the Pock Complex. But these are only

general features. Life, in comparison to such a briefly presented description, was

much richer in events though it really accelerated in the III Polish Republic.

Feed stocks, products and engineering processes

in the Pock Complex

Petroleum from Russia has been flowing incessantly for almost forty years to

the Pock industrial complex. During this time, over twenty oil brands of various

origin have been processed, and their share has reached about 15% of the whole

volume of processed feed stock. It is just this oil, despite its recently less profitable

price difference towards other oils, which is still the most convenient feed stock.

The Complex adjusted itself to such sour oil which, in fact, is the most commonly

produced in the world. Russia with its growing oil export, the attitude towards

OPEC, most recent appeals to OPEC countries to increase production in order to

reduce excessive prices as well as the key oil export route, despite some new trails–

still seem to induce confidence. There are a few companies which deliver oil to

Poland. The most recent long-term contracts, as we read in annual reports, have

been with two companies: J&S and the Russian Yukos, each 40% of our demand.

The energy security of our country is fortunately assured by connection to the PERN

pipeline grid leading to Naftoport-Gdansk oil docks and ORLEN’s holding of

48.72% of its shares. Naftoport is capable of the freight-handling of 23 million tons

of oil annually. It is quite astonishing and worth recalling that in the context of the

energy consumption by the then economy, the peak oil processing in our Industrial

complex history was in 1978, with almost 12.9 million tons of crude oil! Recent

years of completely different times of automobilism development in the Polish society,

let us reach the result close to that from 25 years ago–12.5 million tons in 2000 with

the highest share of sweet crude. Afterwards, its percentage dropped to 10.5% in

2001 and 3% in 2002. Another fact worth noting is 75 years of presence of CDU

technology which is described in Chapter II, with the largest in Poland CDU III unit.

Also, here the last oil distillation unit in Poland, CDU VI, was built. In the meantime,

the desolate CDU I and V were shut down. Other CDUs were expanded or revamped

in the 1990s everybody being aware of their key importance for the Company’s results.

At present, the total oil processing capacity of all CDUs is 17.8 million tons per year.

Natural gas, as a rule being present in activities of oil companies, became a feed

stock when the production of hydrogen was started up–its consumption is more or

less the same as the whole pre-war annual, national production. Will natural gas be

also widely used in the Polish (Pock) power industry?

Motor fuels have always been and still are products of basic importance for an

oil company. Today the market, i.e. motorized customers decide about it. The

127


Aromatics Extraction Plant.

Reforming I Plant in 1963.

statistics quoted earlier in Chapter II and III certainly shows a huge increase trend

in the automobilism development worldwide, which is also visible in Poland today.

In comparison with 1937, there are over three hundred times more cars per one

thousand persons and thus presents at least 70 years distance. The Polish

consumption of petrol is much lower in comparison with already quoted Hitler’s

Germany during the war and its twice higher abilities in production of synthetic

petrol than the present production of the Pock complex. Obviously, fuels have

undergone changes. The career of lead tetraethyl is over–in Poland it lasted for 65

years. The end of the 20 th century brought the end of the production of leaded

petrol. The technology of petrol production is complete and does not differ from

the world standards. The automatic, computer-based system of blending, based on

a very modern NIR (Near Infrared) spectroscopy and built in recent years, blends

petrols from high octane reformate, cracked gasoline, alkylate, isomerisate, ether

and a packet of additives as the basic streams in accordance with detailed recipes.

The new act on biofuels was to force producers to add not only ether ethyl-tertbuthyl

(ETBE) (since 2001 it has been produced in Pock from agricultural, subsided

ethanol and isobuthylene cut) but also ethyl alcohol, which strongly complicates

logistic operations on the main bulk of petrols (petrols with alcohol cannot be

transported by means of far-reaching pipelines or be kept as strategic and military

reserves). Pock gas oils with sulphur content below 50 ppm (since 2000) meet the

severest world specifications of EU directives to be observed, in fact, from 2005. It

can be achieved, thanks to hydrodesulphurisation units. Three such units were

revamped and replenished with HON V and HON VI installations. An additional

hydrocracking unit, recently significantly expanded, produces a perfect quality

summer gas oil, whereas HON VI improves the properties of winter gas oils. Packets

of additives are obviously obligatory. Therefore, it is no wonder that the true

revolution in the quality of motor fuels, brought to Poland in the last ten years

when we, without any delay, followed Europe, results in numerous prizes and

distinctions, presented earlier in this book. It is worth stressing the pertinence and

skills of taking proper decisions. Here again our complex writes its name in the

economies of Europe with their decreasing demand for petrol and growing demand

for gas oils. This is particularly visible in the increasing demand for Diesel engine

passenger cars and in the forecasts relating to the sale of more than half a general

quantity of such cars, recognized in the EU as a method to reduce the consumption

of fuel and emission of greenhouse gases from the transport sector, which is the

major consumer of liquid fuels. Here again it is worth citing the act on biofuels

recommending the addition of rapeseed oil methyl ester (FAME), the production

of which is in fact starting. PKN ORLEN in its Capital Group is initiating the

construction of two such projects. Here a by-product, glycerol, will be produced,

which, as has already been mentioned, was to be synthetically manufactured in

Pock according to the original plans for MZRiP. History sometimes goes strange

ways–it is difficult to be a prophet in one’s own country. In order to achieve the

new quality of fuels, following EU directive 2003/17/EC, PKN ORLEN SA has

already started the construction of a cracked gasoline desulphurisation unit. The

erection of HON VII unit for production of practically sulphur-free fuels has already

been launched. In order to observe the requirements of EU Directive 2003/30/EC

on biofuels, any investments in, for example, ethers, will depend only on

attractiveness and profitability as well as on assuring the stability of fiscal solutions

and assistance (excise duty reduction and/or total exemption).

Two different phenomena, unknown for the economy of the Polish People’s

Republic, appeared in the III Polish Republic. The unusual popularity of LPG is one

of them, especially for passenger car engines. Fiscal solutions created this economic

situation; an interesting fact, though, is that similarly lower rates of excise duty

introduced in the EU countries did not cause such a boom for this kind of fuel. This

129


Catalytic Cracking I Plant

(1962-1963).

Engineers at work.

proves that our impoverished society must bear the excessive burden of excise duty

on fuel prices (in EU these duties are even higher, and Directive 2003/96/EC defines

higher minimum rates of excise tax for their harmonisation). On this particular market,

ORLEN is a powerful player.

Light heating oil experiences even more unusual career, nowadays being a very

common fuel for heating our houses, housing estates, greenhouses, etc. In the 1970s,

we could read only in the professional press about domestic oil used in the USA and

we might be surprised with oil waste, having abundant quantities of coal in Poland.

Now Ekoterm Plus from Pock meets all requirements of the EU. It contains the

necessary packet of additives. On the other hand, it is not a mystery that unfortunately

this fuel is often used as propellent by those who avoid fiscal restrictions.

The vacuum residue, in the part which provides fuel proper for heating and

providing electric power for the complex by its own heat and power station, undergoes

desulphurisation and partial conversion to the product which can be further processed

in the catalytic cracking unit, mainly oriented towards petrol. Heavy fuel oil, which

in the future–under the EU directives–may contain a maximum 1% sulphur or which

may be sold only to recipients possessing desulphurisation units for flue gases meeting

standards of sulphur dioxide emission (also defined in the appropriate EU directive),

is going to become a problem in the future when the level of oil processing exceeds

today’s level.

Lubricating oils and bitumens are important products of refineries, increasing

their added value. The 1990’s brought revamping of Lube Oil units, construction of

a completely new dewaxing unit by means of mixture of methylethylketone and

toluene solvents. The old unit called Acetobenzen (its name coming from the mixture

solvent components: acetone, benzene and toluene), with its faulty filters and a series

of unsuccessful experiments with a prototype of COBR filter in Cracow, could be

totally shut down after 25 years of operation. That vicious circle of impotence was

broken with the brave decicion in those difficult times. Petrochemia Pock SA moved

further on and established a company for production and distribution of lube oils

called Petro-Oil (today ORLEN-Oil). A similar solution was implemented with

bitumens–the modern unit called Biturox was erected on Poerner’s licence and a

company ORLEN Asfalt has recently been founded. Again, the Pock complex produces

over 0.5 million tons of bitumens per year and the new company plans to reach the

output of 750,000 tons. Thus the refinery oil processing, which e.g. in 2002 gave

52% of income, produced 64% of the whole profit.

The use of oil to produce definite chemical products through petrochemical

processes, contrary to refinery processes (the manufacture of energy products, lube

oils and bitumens), is thought to be a more effective utilization of crude oil giving

products which are more deeply processed. Sometimes the idea of petrochemistry is

wrongly referred to, for example, the Gdansk Refinery, or other companies dealing

with the exclusively refinery processing of oil, which is done in all Polish refineries

except the Pock one.

Petrochemical processing of feedstocks coming from oil practically goes only in

two directions: towards olefins and aromatics. Further on the road towards more

usable end products, there are plenty of combinations leading to a large variety of

goods. Thus it is not especially surprising that the decisions of the Chemical Industry

Minister dated 1965, assumed the production of, among others, detergents and

it is as late as in 1971 that, for the first time, we heard the enigmatic expression

“petrochemical production.” At that time, Olefins I Plant was already in operation

and Aromatics Extraction Unit was being built. However, like almost ten years before

in Owicim Plant, the butadiene plant was the key notion for authorities, so important

for the rubber and tyre industry and so indispensable to the army. But in Pock, the

first petrochemical products which appeared in 1968 were cumene and later phenol

plus acetone. Strictly speaking, only a smaller part of the mentioned products originated

131


Catalytic Cracking I Plant

(1962-1963).

Pyrolysis and Separation

of Pyrolitic Gases Plant

(Olefins I).

Chamber coking unit in 1965.

from propylene separated from FCC I stream, whereas benzene, needed for this process

in considerable “majority,” approximately 70 to 30, was purchased from the

carbochemistry–coke oven benzol processing, coming from coal. But really the

Aromatics Extraction Unit (soon to be revamped) made phenol and acetone truly

petrochemical products. Then, in the course of deeper processing of these precursors,

also some other Polish chemical companies produced nylon (Stilon) fibres and other

products (from phenol), like bakelite as well as the organic glass, well-known as

Plexiglas (from acetone).

One could “smell” the great petrochemistry when Olefins II Plant was started

up in 1980. So far it has been the largest event of Polish petrochemistry and probably

of the whole Polish chemistry. The chemical industry in the EU countries is the second

industry with regard to income volume. In Germany and the USA, it is the leader of

export which is basically important for the modernity of products manufactured by

other industries. A successful start-up of the Plant, already mentioned in Chapter III,

was conducted by the company’s later president, Konrad Jaskóa. Ethylene from Pock

flows via a pipeline to Anwil Wocawek. In 2002, that chemical company, from

ethylene and chlorine coming from salt which is mined by IKS Solino (Inowrocaw

Salt-Mines), reached a record production of polyvinyl chloride, PVC (one of the most

well-known plastics), of 23,8440 tons. Another product from Olefins Plant and FCC

II, propylene, is the basic feedstock for the export hit of Nitrogen Works in Kdzierzyn–

Oxo alcohols. The end of only 15 years’ period of petrochemistry development in

Pock, and obviously in Poland, took place in 1983, along with the construction of

Ethylene Oxide and Glycol II Plants. Olefins II Plant was expanded in 1990 by

20%–from 300,000 to 360,000 tons/y of ethylene–which let the small and desolete

Olefin I Unit be shut off, without a damage to the general balance. At present, Olefins

II Plant is being significantly revamped at a cost of 250 mln euros to 700,000 tons/y

of ethylene and this makes up a prelude of unusual, historical development of

petrochemistry in Poland–in times when this mature industry practically does not

develop in Europe.

And thus we have come to the biggest petrochemical endeavour in this part of

Europe. On March 1, 2003, PKN ORLEN SA concluded a joint venture contract

(50:50) with Basell Europe Holdings B.V., the leader of polyolefins production in

Europe and the second largest company in the world, established from petrochemical

assets of BASF and Shell. The contract assumes the construction of two world-scale

plants: one producing 320,000 tons/y of HDPE polyethylene and the other producing

400,000 tons of polypropylene. The cost of an investment at 300 mln euros. The

expected IRR is to bring 18%. This gigantic undertaking, a visible symbol of

globalization in our country, can be viewed as an enormous success of the Board of

Directors. It is an impressive progress if we compare the levels of plastics consumption

per capita in Poland, similar to Brasil, and equal to 1.5 kg in 1968. Nowadays, 35

years later, for the first time in Pock, the annual border line of 300,000 tons of

polyolefins was exceeded (157,700 tons of polyethylene and 142,800 tons of

polypropylene in 2002). The petrochemical complex produces, therefore, almost 8

kilograms of plastics per capita in Pock and, along with Anwil Plant in which ORLEN

has 76% of the shares, it makes 13 kilograms. This huge joint-venture investment

increases that volume by 18 kilograms per person. Decades of civilization negligences

are being made up, although slowly. However, these comparisons show the power of

the progress.

The statistics of plastics production in Pock clearly shows its stepwise growth–

from 30,000 tons/y of polyethylene from the first unit and the later added another

unit of 100,000 t/y; for polypropylene, that growth began from 30,000 t/y from

the first unit, another similar unit added, up to today’s state after expansion by

about 150%. This expansion was not simple–the new extrusion line from the

beginning of the 1990’s, as well as formerly bought coloration unit, were not

133


Reforming I Plant being built.

We have processed 100 million tons

of crude oil...

successful. The substitute production of compounded polymers also did not bring

amazing results. The production of bi-axially oriented polypropylene film was the

beginning of a difficult road which was finished with founding of a joint venture with

Flexpol Company. At present, PKN ORLEN SA is considering the sale of its minority

shares in that company. Film is an interesting subject for considerations concerning

the barriers of entry and survival in a business without tradition and markets.

Technical gases, oxygen and nitrogen, as well as heat sold to the city in the form

of hot water, complete the palette of products. Periodically, an excess of electrical

power was also sold to the national power grid.

The Company’s management has always chosen modern and up-to-date

technological solutions and processes for its units and plants. For example, the UOP’s

processes are very common here: reforming, cracking, hydrocracking, alkylation,

isomerisation and hydrogen recovery. Also, the Italian oil concern ENI and its sister

companies played an important role in the building of the Polish refinery industry.

That cooperation started with the construction of combined Reforming I, Ethylene

Oxide and Glycol units. These business contacts were successfully continued during

execution of the big development programme from the end of the 1990’s. Several

investments were executed in cooperation with German contractors, e.g., Extraction

of Aromatics Arosolvan, p-xylene manufacture processes, Olefins I or Reforming V

designed and delivered by Mannesmann in the beginning of the 1990’s. The contract

on Reforming V was concluded in the conditions of high risk for the German company,

in light of existing payments holdups in our economy and the lack of any rating

defining our creditworthiness. Credit taken from KfW Bank, which was also active in

the reconstruction and rebuilding of GDR, turned out to be superb help on the part

of our powerful western neighbour. French IFP, today Axens, is well-known in Pock

for its Vacuum Residue Hydrodesulphurisation and Hydrogenation of Steam Cracked

Gasoline units. There were also American companies, like ABB Lummus Global

(Olefins II), the Japanese companies (Toyo, Mitsui, Nippon Zeon) as well as some

Soviet ones. There were also such giants as Shell (Ethylene Oxide II) and small ones

from countries of the former Comecon. There were also Polish designs and processes,

such as the very successful projects from the 1990’s: MTBE, HON V or expansion of

polypropylene plant.

It is worth reminding that the exceptional pattern of the Pock refinery was

already visible in the 1970’s. It did not follow patterns of the Soviet or European

refineries with their simple processing and the largest yield of fuel oil but it followed

the American refineries with processes of conversion as well as units increasing their

added value.

The climate of innovativeness in the Pock complex and its openness to the world

were exceptional, if we consider the reality of the Polish People’s Republic. As a result

of courageous investment programmes, worth over 2 billion USD, this Cinderella has

been transformed into an attractive smart unmarried woman as if touched by a fairy’s

wand.

The period of transformation has radically changed the company

In the communist economy, till 1989, law forbade individual companies to make

investment decisions–this was reserved only for central, ministerial planners. Now the

situation has changed dramatically. Among the principal legal acts which are in force in

the III Polish Republic with regard to companies, is the act on privatization of public

enterprises and the Commercial Code, Energy Law relating to companies of our industry,

Articles of Corporation, required licences, an act on obligatory reserves, acts on quality

of products and services, on protection of environment, on technical supervision, and

antimonopolistic acts as well as acts and directives of the European Union.

The transformation period, although peaceful, was not free of pressing upon

personal changes. It is easy to understand–it was in fact a bloodless revolution and

135


.

A labyrinth of stairs, ladders

and platforms marks the route

for employees.

A picteresque element of the

unit.

This plant hides thousands of

points and sites in which

technological processes

can be controlled and monitored

by the staff often without leaving

the control room.

Industrial landscape and

the setting sun.

normally such revolutions bring various executive staff sweepings. However, during

such events the people’s justice is even blinder. The dispute about the contract on

Reforming V crossed the limits of common sense, whereas that relating to

polypropylene extrusion was a bit more moderated.

Finding itself in the new economic surroundings after 1989, our concern at first

faced severe competition. Big oil concerns as well as small companies appeared on the

Polish market. Agents, such as oil purchasing Ciech and fuels selling CPN, were

slowly deprived of their monopolistic role and their margins of profit bacame attractive

for taking over by MZRiP. The company was forced to independent functioning on

the market. Its marketing department had to be set up and developed. The free

market economy had its price: the first MZRiP filling station in Pock, with

environmently friendly solutions of vapours recovery while unloading and tanking of

fuels, did not turn out a successful experience as well as some businesses with insolvent

customers. For a long time, the justice administration has had much work with these

matters, however, without the acknowledgement of MZRiP workers’ guilt.

Our concern began to purchase oil independently at the beginning of the 1990’s.

A short-term credit from a foreign bank, one of the newcomers to Poland, was taken

to execute that first independent deal. Slowly, payments congestions stopped being a

nightmare.

Building of our concern’s presence on the market consisted in offering of new,

high quality fuels, winning partners for establishment of franchised grid of petrol

stations, building of LPG filling plants, fuels wholesalers, wholesalers of plastics,

starting up of our own fuel filling terminal with modern environment friendly system

of fuels vapours recovery, with bottom filling of trucks in sealed closed loop, purchasing

of our own tank trucks and providing services by means of them. In the course of the

growth of the company’s market position (since July 1, 1993, it was called Petrochemia

Pock SA, a company fully owned by the State Treasury) Regional Market Operators

and Regional Trade Offices were established. At the end of 1998, Petrochemia operated

a grid of 500 filling stations including 87 of its own. Moreover, there were 8 LPG

companies of Petrogaz and 10 gas filling plants which sold about two thirds LPG

produced by Petrochemia. In 1998, the sale structure looked peculiar: 23.4% was

sold through its own grid, 20% through the agency of CPN, 5.9% by means of the

Southern refineries, 9.4% was bought by great companies and the remaining 41.3%

was bought by other customers. It was clearly visible that Petrochemia Pock SA

achieved success in the execution of pro-market strategy and, finally, it won the

competition with CPN’s monopoly–in the liberalized and free, after deregulation,

fuel market existing in Poland since 1997!

Petrochemia Pock paid much attention to quality policy. It was granted ISO

9002 certificate as one of the first ones in its trade. It was the proof of carefulness

about its processes and products quality, arousing customers’ trust. This helped

establish a strong market position on the national territory where the Company was

a leader, also with regard to its revenues.

Modernization or expansion of the concern was taking place in all spheres.

Petrochemia Pock revamped and rehabilitated production facilities (catalytic cracking)

or plants producing utilities. Traditional control system was replaced with DCS

computerized control system delivered by the best suppliers of such equipment and

advanced measuring techniques were introduced. Computerization entered offices.

The company bought, trained and started up the system SAP R/3 of management,

book-keeping with numerous modules for cost control and materials handling. Trading

departments got access to Reuter’s links and cooperating banks. The executive and

managerial personnel attended many trainings and got specialized knowledge. In

1994, over 2700 employees participated in professional trainings. Public relations

acquired special meaning, just like advertising and sponsoring: granting of money

for the second bridge in Pock, charitable actions, donations for housing and culture,

137


Nature does not shun big

industry.

including a spectacular gesture of donation of the king Stanisaw August’s portrait

from Bacciarelli’s study to Warsaw azienki, where it had its place about 200 years

ago. Moreover, Petrochemia finacially supported the local medical facilities, schools,

Technician’s House, public library, cultural organizations, sports and some important

events.

Employees were and are upgrading their qualifications. In 1998, about 10% of

the staff had higher education and 43% had secondary technical education. It meant

that the educated employees made up the majority of the total number of the staff.

The act on restructuring of enterprises of 1990, intended to increase their value

before privatization, necessitated a special programme in the company. This programme

assumed appointment of business entities as profit centres; algo a meticulous costanalysis

and controlling system was introduced. In the beginning, daughter-companies

were set apart: Designing Office, Transportation Company, Social Services and others.

Our concern began to execute capital investments and establish the Capital Group

with its pearls: Naftoport, Anwil, IKS Solino, Polkomtel, Petrotel and in Germany–

Chemiepetrol. The Fire Brigade and Chemical Rescue Services remained in concern’s

structures but the Security Guard Service was outsourced in the form of Petro-Ochrona.

Additionally, several LLCs (limited liability companies) were seperated from the

maintenance departments of the concern. These included maintenance companies for

the repair and overhauling, of mechanical, instrument and electrical engineering

services.

The protection of the environment became an absolute priority. Already in the

beginning of the transformation process, about 40% of the investment budget was

spent on that objective. That effort resulted in granting ISO 14001–the certificate of

meeting international standards. Our concern also joined a programme called Responsible

Care, which a group of Canadian enterprises proposed in 1984 with regard to chemical

industry companies. The programme consisted in the monitoring of emissions through

automatic stations as well as manual measurements, audits and it became an everyday

routine. Our concern developed and implemented the policy of environmental

protection; with regard to technical development, concern applied and applies the

principles of sustainable development. For example, in our heat and power generation

plant and CDUs furnaces, we have applied low NO x

emission burners with reduced

emission of nitrogen oxides. In order to reduce water consumption, we introduced

the system of recycling of treated industrial sewage, which was acknowledged and

awarded with a golden medal at the Innovative Fairs in Brussels in 1997. In order

to meet requirements set by the authorities, the company worked out and

implemented the so called Ecology Improvement Programme. The same year, the

environmental protection expenditures even reached 80% of the whole investment

budget. Annual environmental reports are published and then analysed and discussed

by the experts’ team.

In 1997, at the conference “Oil and Gas” in Cracow, the president of Petrochemia

Pock SA was honoured with the ukasiewicz Medal–an unusually prestigous award

in Poland in the oil industry. Of course, all Petrochemia’s employees of all professions

of every work station contributed to this act of distinction.

Polish Oil Company ORLEN, joint stock company

The oil sector has waited a long time for discussions over a programme of its

transformation to get materialized into concrete decisions about its development. It

had lasted since the first years of the system transformation. Many foreign advisory

and consultancy firms participated in this process but without constructive

conclusions. In the meantime, the Hungarian MOL was building its power, the Czech

refineries were sold to a consortium of strong western oil firms, the refinery in Lithuania

was sold to the Americans, the Schwedt refinery in the former GDR was privatized

and a new refinery in Mider Leuna in Germany near our border was started up. Also,

139


.

A clouded sky and sharp

contours of distillation towers.

Autumn landscape.

on the internal market, the competition in fuels distribution was already strong and

the competition in the refinery field was approaching our borders. CPN practically

lost the market of fuels distribution to Petrochemia Pock. Further argument would

not have served anyone. Nafta Polska [Polish Oil] quite unconcernedly watched

those proceedings of the eradicative competition, whereas oil got cheaper, mergers

of great concerns were intensified and it was already high time that ultimate decisions

were made. The lonely lobbing of this provincial company, after all, did not promise

well...

The Polish Oil Company (PKN), a joint stock company, came into being through

incorporation of CPN to Petrochemia Pock on September 7, 1999. On the occasion

of that incorporation, CPN was divided in such a way that its best storage tank farms

were separated into independent enterprises called Naftobazy and the railway tankers

and their transport company, Dyrekcja Eksploatacji Cystern [Management of Tankers

Operation] (DEC), were quickly enough sold to an American company. Thus, PKN

was effectively deprived of its important logistic back-up facilities, including pipelines

of oil and fuels which were fully controlled by the state, and the principle of third

party access was in force, as well as the majority of the domestic storage capacities. The

services of those companies, however, are not cheap in this aspect. As a result, the

concern was immediately forced to build its own big storage tank farm, its pipeline

and its own storage volumes in salt caverns. It was compelled to disperse its efforts, to

prioritize its objectives adjusted to its limited financial resources and to slow down its

expansion. Meanwhile, the Hungarian MOL could be an operator of its oil pipeline.

PKN made its debut at the stock exchange with 30% of its 420,177,137 stocks

on October 21, 1999. A number of stocks in the form of GDR also entered the

London stock exchange.

Being no longer a local firm but a concern of nationwide range, it faced the

integration of its structures, especially the commercial ones. The new strategy assumed

as its important task the creation of a new image of the company. And this meant a

new name and logo. On April 3, 2000, Shareholders’ General Assembly voten on the

proposed name “ORLEN,” logo and colours. Since that time, it has been operating as

PKN ORLEN SA.

The new company continues the restructuring and growth of the Capital Group.

The Group brings together the Trzebinia refinery, a refinery in Jedlicze, increased

shares in Anwil Wocawek–generally the whole Group consists of over a hundred

business entities, including 24 limited liability companies which had been seperated

out from the concern. In 2000, already 72% of PKN ORLEN’s shares were on the

stock exchange. The company belongs to the biggest and its shares enjoy high liquidity.

Still, there are 12 regional trade offices. Out of 152 storage tank farms, 110 were

destined for liquidation or resale. The management made a decision to build a storage

tank base in Ostrów Wielkopolski and pipeline from Pock to that city as well as to

build storing caverns in saline diapirs near Inowrocaw. A loyalty system in the form

of fleet cards was implemented as well as the rebranding of CPN’s and Petrochemia’s

filling stations to strive for the unification of their image. In 1999, 15% of ORLEN’s

staff already had higher education and together with the secondary education staff it

made up 60,5%. 9500 employees underwent all kinds of training and coaching. A

year later, in 2000, already 23% of ORLEN’s personnel had higher education in

comparison to 10% just 5 years before! These are significant changes, which perhaps

in the least degree affected the production sphere.

The annual report for 2001, shows that the year of the September 11, the year of

recession and high oil prices was also the year of the sale fall and worsening financial

and economical results. An important index of the return of the average capital

employed–ROACE–fell from a quite good level of 11% to 4.6%; net profit from 944

mln PLN in 1999 and 902 mln in 2000 fell to 367 mln PLN. KBC–a renowned

company seeking savings in the production costs–reached a result of 0.40 USD/bbl

141


This is not a fire–this flare is

a symptom of a safety operation

of the plant.

Slender towers aiming at the sky.

These tanks contain millions

of fuels litres–will rape seed

biofuels replace fossil fuels?

and it expects to reach 0.10-0.15 USD/bbl more from the implementation of the

suggested improvements. Revamping of Olefins II Plant was started, IKS Solino was

to attain 1.75 million m. 3 of storing capacity for oil and fuels, ultimately–5 million

cubic metres; the Jedlicze refinery started the plant for processing 80,000 t/y of spent

lube oils, the tank farm in Ostrów Wielkopolski expects 55 thousand cubic metres of

capacity and now plans to finally achieve 175,000; moreover a pipeline of 214 km. is

being laid.

The present condition of ORLEN, which is a live, active organism, is fully reflected

in the concern’s annual report for 2002 as well as in the data waiting for their

publication after the end of 2003. PKN ORLEN SA entered the family of recognized

international companies for good when in the first quarter of 2002 it got BBB rate by

the Fitch agency, the best rating of all Polish companies. Its creditworthiness was

estimated high, which increased confidence in the financial circles towards this concern.

That fact of acknowledgement was also confirmed by the Foundation of Accountancy

Development that ORLEN’s annual report for 2000 was the best in Poland. PKN

ORLEN is still the largest company in Poland.

The year 2002 brought the change of the centre of gravity from the production

activity into a trading one–this is what is written in ORLEN’s strategy. And although

it is logical and obvious in the free market economy, it is worth noticing perversely

that it is a kind of rehabilitation of the “swallowed” CPN. This somehow humorous

statement should be completed with the information that there were no disputes or

animosities among employees coming from various sectors of departments of the

merged concern. The cultural differences, which are so common in case of mergers

and full integration, luckily were not an obstacle in the new company in the process

of its employees’ identification with the concern and its objectives and mission.

PKN ORLEN’s operating in a difficult competetive environment of strong market

players, under high oil prices, slowdown of the economic growth rate of powerful

economies of the USA, Japan, Germany as well as in the slump on the Polish market,

has to seek savings and methods to reduce costs. The programme of cost cutting which

was often repeated in various options in many companies worldwide and which became

a standard for executives’ actions forced by the shareholders to achieve better results

and to increase the company’s value, had also to be implemented in PKN, together

with introducing rational management of material and human resources as a priority.

Contracts with consulting companies, e.g. with KBC, were aimed at finding savings

in production, or, with Shell Global–at Company’s operations and planning of overhaul

shut-downs. Revenues in 2002 were lower than in the previous period and according

to the international financial standards IFRS, reached only 16.9 billion PLN (Polish

Zoty) and a net profit of 421 million PLN. The company’s assets were growing, its debt

fell to 2.3 billion PLN. But although the financial leverage (debt related to equity; the

latter one grew to 8 bln PLN) reached 28%, a safe level, an important factor ROACE

was unsatisfactorily low–only 5%. It should be stressed here that in times of very

high unemployment rate in Poland the employment in our Capital Group went up to

17800 people. Revenue and profit in ORLEN’s particular segments of activity were

as follows: the refinery brought 6262 million PLN of revenues and 793 million PLN of

profit, petrochemistry–4166 million and 200 million PLN, the remaining activities:

1639 million and 45 million PLN. Therefore, from the refinery’s income of 52% the

profit made up 64%, which clearly confirms priorities. But if we consider the assets of

particular sectors and attained profits, then the refinery operations achieved an index

of about 1.6, whereas the petrochemical ones have an index 2 and the remaining

operations did not bring even 1. This simple test shows the importance of petrochemistry

in the company and relatively low profitability of other operations. This affects decisions

which assets should be kept and taken care of as our core business and which assets

should be got rid of (divestment). Two specialist companies help improve the ROACE

index, which rose a little bit from the level of 4% in 2001 and now is a bit better.

143


A night view of the Production

Complex.

Here you control and monitor

the operation of the equipment

and systems by means

of computers.

The Mazovian weeping willows.

In the sphere of production, various aspects like the EU requirements, especially

with regard to the quality of products and ecology (but also conditions of

competitiveness), excise duties, liberalization of the energy market, energy security,

etc.–all these factors extort the necessary investments in order to stay in business,

which is usually estimated as lower than the costs of quitting the business. Investments

in the production sector in 2002 reached 1/4 of the total of 888 million PLN.

Investment expenditures in production, 240 million PLN, in 2003 were to reach 650

million, revamping of Olefins II and Aromatics Extraction plants is being executed.

A great event for the refinery and the sector was the start-up of CDU III, which was

revamped from 3.2 million t/y to 6.7 million–the largest plant in Poland and Central

Europe. This plant is to help PKN to secure feedstock for the growing demands of

the emerging big petrochemistry. Meanwile, the record of white products yield was

in 2001 and reached 79.72%, bordering on the magic 80%, which was possible to

achieve thanks to the costly technologies of oil conversion; generally, that oil yields

only half of those products. That exceptionally high complexity of oil processing is

reflected in the increasing of the added value because these “white products” are

solely demanded by the market.

Today’s market is much different than several decades ago in the Polish People’s

Republic, which was presented in Tables presenting Poland’s demand or export of

petrochemicals to gain hard currency. Petrochemistry in that Poland, when its system

was popping off, did not have chances to develop. At that time, nobody followed

professor Taniewski’s advice when he stressed the role of petrochemistry. Now, thanks

to the revamping of Olefins II and the construction of Polyolefins Poland, LLC, a joint

venture of PKN with Basell, is to become a chance and a test of the truth for

globalisation in the country with the civilization gap.

ORLEN wins new customers, despite the Polish anachronistic custom of

overestimation of services of foreign filling stations, which in majority sell fuels produced

just in Pock and not necessarily gloryfing a client. The programme of fleet cards

includes over 1000 companies, the programme Vitay for individual customers–over 2

million! Soon this programme is to reach about 70% of the sales at ORLEN’s own

stations for over 3.5 million clients with Vitay cards.

In 2002, PKN possessed 1321 CODO (Company Owned Dealer Operated)

filling stations and 631 DODOs (Dealer Owned Dealer Operated). At the end of the

year, it expects to operate 1313 stations, including 845 with ORLEN’s logo and 620

franchised ones. Up to 2005, PKN plans to reduce its total number of stations to

1100. This downward trend, also observed in reduction of storage tank farms from

30 to 20, in the light of CPN’s inherited dowry, shows insufficient value of this property

which does not meet contemporary standards. On the other hand, the purchase of

494 ARAL (now BP) stations in northern Germany for the price of 140 million euros

and of total annual sale of 2.8 million litres, i.e. about 50% more than all our stations

in Poland, is an undoubtful success. ORLEN’s grid of filling stations in Germany

with its 3% of the market share (as to the number of stations) is the sixth in size in

that country but, taking into account their location mainly in the lands of northern

Germany, that share sometimes is equal to 7%. ORLEN, being an outpost of the

Polish presence in the European Union, fights for its (and not only) good reputation

on that difficult, extremely competitive and mature market with a long tradition of

high quality products and services. It is a huge challenge which was undertaken to

build equal chances for the next generations of Poles.

Long-distance pipelines from Pock pump 55% of its products, our fuels reach

country regions which are exposed to the nearness of foreign competition. PKN

ORLEN, just as other oil entities in our country, is obliged to keep strategic and

commercial reserves of fuels and oil. At the end of 2002, those reserves reached over

1 million tons (431,000 tons of oil products and 583,000 of petroleum), including

198,000 tons of crude oil and 86,000 tons of fuels in the IKS Solino caverns.

145


These pipes and apparatuses

house complicated chemical

and physical processes.

Polish red poppies and big

chemical processes.

PKN ORLEN SA Capital Group amounts to 116 companies. This economic

national giant transfers to the state budget make up about 10% of the total Polish

budget! In 2003, two new entities were established in the Group: ORLEN Laboratory

in January and ORLEN Asfalt in April. The fate of companies in this Group is not

equally gracious for all–for example in 2002 the Jedlicze refinery made a net loss of

almost 31 million PLN. Anwil Wocawek is looking for its chance in the development

of petrochemistry, planning to construct a PET (widely needed plastics) Plant of

120,000 t/y with a Korean partner, but probably without cooperation with Pock

with regard to feedstocks. Polkomtel, as a company with our shares which is destined

to be sold, has better profits than ORLEN from GSM cellular telephony, unsually

lucrative in Poland, and increases its potential value.

In August 2002, the Warsaw stock exchange valued only 15.3 PLN for a share–

a historical minimum. However, it is also important that out of 420 million stocks as

many as 320 million changed hands. High liquidity brings expected income, especially

for that institution, which is a barometer of the state of the national economy; the

stock exchange cannot return to its splendid rate of growth from the beginnings of its

existence.

The environmental protection is still the highest priority–in 2002 PKN was

awarded a diploma for the Responsible Care initiative. Another prestigeous contest

prolonged ORLEN’s right to use the slogan “environment friendly company.” The

Ecology Improvement Programme is nearly over.

Our country’s joining the European Union required the establishment of an

office dealing with EU affairs. ORLEN has wide contacts with such European

organizations as EUROPIA–grouping refinery companies, CEFIC–association of

chemical industry, EFOA–association of oxygen compounds producers (mainly ethers)

blended with petrol, or EHRN–the European Human Resources Network–an

organization dealing with social aspects of companies’ operation. The membership in

the European Union is a serious challenge relating to the high-quality of fuels and

larger competition on the market, also due to a considerable decrease of fuel

consumption in passenger cars by about 25%–to 5.8 litres per 100 kilometres in

models planned for 2006. Other possible implications consist in the increase of required

obligatory reserves for 120 days, the obligation to increase excise duty, for example to

minimum 302 euros per 1000 litres of gas oil, bearing the costs of growing emissions

of refineries greenhouse gases (these emissions are to be available on the market as

any other commodity to be purchased at companies with unused limits of such

emissions). Obviously, the list of such challenges, which are also threats as well as

chances, may become much longer, also as a result of full liberalization of the energy

market, which is to take place in the EU in the middle of 2007, after a partial

liberalization already in the middle of 2004.

Company as a complicated organism

It is a cliche that large enterprises employ many people of various specialities,

which sometimes may seem strange for a layman. Though it is probably difficult to

present some revealing ideas here–still, to convince readers who do not deal with

company’s organization or management, you may find here some issues which are

as essential for a company’s proper operation success as finances and sale or

production.

PKN ORLEN SA, which operates in the territory of the whole country,

attentively observes local, regional, national and international events and processes

which in turn affect oil prices and, in consequence, the price of fuels. And it is a

global market in which competitive companies will immediately take advantage of

increasing import to Poland. It all means that the company is a very complex

mechanism in which employees and their efficient workmanship are the most

important asset. The transformation of Petrochemia Pock, in fact more local than

147


Unusual view of the refinery

plant in the night scenery.

Piping and towers dominate

in the landscape of the modern

refinery.

national company, into PKN ORLEN SA required building of new organizational

structures being able to undertake proper decisions to execute them effectively.

The helmsmen of this Concern, i.e. the Board of Directors, in order to operate

effectively needed to separate four large fields for the sake of supervision and audits.

These are human resources and systems of management, finances, sale and, finally,

production and development–all coordinated by the president of the board. The

Suprvisory Board plays the role contained in its name and Shareholders’ General

Assembly plays the role of the sovereign. The court register entry and the Articles

of Corporation define the area and the range of company’s activities. The Company

holds stock and reserve capital and has to generate profits. The production complex

in Pock, its real estates in Poland and its Capital Group make up the essential

material assets constituting the value of the company and being, in theory, essential

for its pricing at the stock exchange. However, in practice the reliable and true

value of a company, i.e. its market capitalisation being the product of the number

and value of its stocks and established by the market just at the stock exchange,

fluctuates due to various reasons. And this is what happens with all stock exchange

companies, even the largest oil concerns. For example, ExxonMobil quotations fell

from 302 billion USD to 260 bln; similarly, BP and Shell from over 220 billion went

down to about 180 billion dollars. When investors no longer have trust in a company,

the pricing of that company falls. The opposite happend with PKN ORLEN SA–its

market capitalisation of 2 billion USD in the autumn 2003 significantly went up to

about 2.7 billion dollars. Transparency of operations and finances as well as care

about impeccable and attractive image played a vital role here. Therefore, the

communication with investors as well as with society, mainly through media, is

especially crucial and a balanced tone of information as well as reliable informing is

absolutely a must.

PKN ORLEN SA gets its revenues mainly through the sale of its products while

other goods and services usually make up just a bit more than 3% of its income. In

consequence, an adequate strategy of the company is constructed, obviously taking

into account lots and lots of factors. All of these factors are presented in an annual

report, and let me summarize them in short as follows. The establishment of a regional

concern in Central Europe, managed by ORLEN, is a strategic objective for the next

3 years. Further privatization of the company will be helpful in achieving this aim.

The highest standards of operations and workmanship and the concern’s development

are to serve stockholders and clients. The expansion on the market, the rehabilitation

of the stations grid, reduction of costs in all spheres of activity as well as

restructurization–these are all helpful means to achieve that objective.

Banks play a key role in running business; contracts PKN has accounts in over

thirty different banks and has in cooperation with many of them. It gave up, however,

the bank activity, selling its shares in LG Petro Bank which was established by CPN

with a Korean partner.

Our concern regulates its business relations with surroundings through

agreements. It has concluded contracts on oil deliveries, with the Polish Oil Mining

and Gas (PGNiG) on deliveries of gas, contracts on execution of particular investment

projects, purchase and sale agreements, contracts of insurance and many others.

ORLEN was granted a concession, required by the Energy Law, for the business and

a permit to use the natural environment. We possess numerous patents, licences and

trademarks protecting our intangible assets. Another vital aspect is R&D works,

ordered and performed, which are so important for our modernity, competitiveness,

results and image. ORLEN does not limit itself only to the pure function of generating

profit. Our concern sponsors many organizations and events, conducts charitable

activities, helps various funds and foundations, supports sciences, education, culture

and amicably cooperates with local communities in their needs because it feels morally

obliged to do so. It is worth stressing that PKN ORLEN SA sponsored the publication

149


A panoramy of Pock Refinery.

of a reprint of Professor Stanisaw Pilat’s book from which we dared to take a quotation

in the present album. The Year of ukasiewicz, being the inspiration to write and

publish the present work, was commemorated, among others, by the organization of

an all-Polish conference in Pock and the laying of a wreath of flowers by the statue of

the person who started the whole oil history. We want to remember our tradition, our

roots and to build our future on it.

BIBLIOGRAPHY

Klocek Alina, Pocka Rafineria i Petrochemia w latach 1959-2000. Monografia [tapescript in possession of

the Author].

PKN ORLEN SA’s Annual Reports, 2000, 2001 and 2002.

151


V. TABLES

Year USA Russia Dutch India Romania Burma Poland

1875 8 788 697 – 108 – 158

1880 26 286 3 001 – 115 – 229

1885 21 859 13 925 – 193 – 465

1890 45 824 28 691 – 383 118 659

1895 52 892 46 140 1 216 576 372 1 453

1900 63 621 75 780 2 253 1 629 1 079 2 347

Table 1.

Production of crude oil in 19 th

century (thousands of barrels).

Year 1905 1906 1907 1908 1909 1910 1911 1912

Oil production 801 760 1176 1754 2077 1762 1455 1167

Oil processing in Austria 663 831 977 1266 1628 1439 1556 1755

Including Galicia 223 214 282 154 570 712 733 907

% of the total 33.7 25.8 28.8 30.6 35.1 49.7 46.8 51.5

Locality Total Numer Average

production of wells depth

in tank cars in m.

Borysaw-Tustanowice 2 001 600 980 1 225

Mranica 145 900 120 1 070

Schodnica 190 000 500 500

Bóbrka-Równe-Rogi-Wietrzno 65 000 159 600

Potok 58 000 174 700

Bitków 56 000 130 900

Wakowa 46 000 150 500

Urycz 40 000 180 350

Soboda Rungurska 33 500 300 250

Wglówka 23 200 200 300

Harklowa 16 500 210 300

Krocienko Wyne-Nine 14 700 100 450

Ropienka 14 000 70 300

Rypne-Duba 13 300 80 600

Humniska 7 300 35 400

Zmiennica-Turze Pole 7 000 30 450

Tarnawa Dolna 6 700 18 750

Zagórz 6 600 19 700

Grabownica Starzeska 6 500 25 450

Pasieczna 6 000 170 300

Strzelbice 5 600 40 250

Kosmacz 2 300 9 600

Table 2.

Oil production and processing

(thousands of tons) before WWI

in Galicia and Austria.

Table 3.

Production of oil by particular oil

fields in Poland in 1874-1928;

1 tank car=10 tons.

Total 2 765 700 3 699 675 Table 4.

Number of oil fields in operation,

number of employees, production

of oil years 1913-1938.

Year 1913 1923 1926 1928 1929 1932 1933 1934 1935 1936 1937 1938

Oil fields in operation 444 474 546 642 655 723 – 785 – 835 812 854

Workers (in thousands) 8.6 14.0 9.4 11.4 11.0 8.6 – 8.9 – 9.6 10.3 10.7

Production (in thousands tons) 1114 737 796 743 675 557 – 529 – 511 501 507

Drohobycz 1004 649 679 624 556 421 – 399 – 350 337 325

Jaso 67 56 70 76 74 96 – 95 – 108 118 136

Stanisawów 43 32 47 43 45 40 – 35 – 53 46 46

World (in mln tons) 54 – – 184 – 181 197 208 226 246 279 –

152


Table 5.

Production of crude oil

in Borysaw oil field,

in 1936 and 1937.

Company Oil production Numer of

in 1936, tons wells in 1937

Maopolska 125 620 168

Galicja 25 850 31

Limanowa 27 460 40

Standard Nobel (Vacuum Oil) 13 460 16

Polmin-Pollon 680 2

Pionier 1 150 1

Gazolina 220 8

227 other small firms 76 920 493

Total 271 360 759

Table 6.

Some other data on oil production

in the first half of 20 th c., mln tons.

Year 1913 1928 1936 1937

World Production 53.7 183.8 246.5 278.6

USA 34.0 123.6 148.9 173.0

Russia (and USSR) 9.2 12.3 27.4 27.8

Venezuela – 15.3 22.9 27.8

Iran 0.2 5.8 8.3 10.4

Dutch India 1.5 4.3 6.4 7.3

Romania 1.8 4.3 8.7 7.1

Mexico 3.8 7.6 6.1 6.9

Iraq – 0.1 4.0 4.3

British India 1.1 1.2 1.3 1.4

Poland 1.1 0.7 0.5 0.5

Germany 0.1 0.1 0.4 0.5

Table 7.

Output of Polish refineries

between the wars (1918-1939)

(thousands of tons).

Year 1928 1929 1932 1933 1934 1935 1936 1937 1938

Refineries 26 30 29 35 29 26 25 27 27

Their products 664 595 502 521 485 469 450 456 481

Light naphta plants 19 20 24 26 26 26 25 28 28

Light naphta 32 35 39 42 41 40 38 39 41

Table 8.

Production, consumption

and export of oil products between

the wars (1918-1939), tons.

Year Production National Consumption National Consumption (%) Export (t)

1925 659 100 258 350 39.20 400 750

1926 734 710 288 700 39.30 446 000

1927 619 200 350 000 53.91 299 200

1928 700 800 374 600 53.45 320 200

1929 633 400 398 000 62.81 235 400

1930 617 800 392 100 63.47 255 700

1931 600 700 344 800 57.40 255 900

1932 538 100 304 500 56.40 233 600

Table 9.

Export of petrol, light naphtha

and paraffins (thousands of tons).

Year 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938

Petrol+light naphtha 37.8 33.7 62.3 57.0 50.1 55.6 41.5 49.4 – 4.7

Paraffins 28.0 23.7 21.9 20.0 22.2 18.5 19.2 11.0 17.5 12.3

153


Product Production Import Export

Petrol and light naphta 127 534 18.0 47 478

Kerosene 156 592 0.8 26 939

Table 10.

Average production, export and

import of petrol, light naphtha and

kerosene in 1933-1937 (tons).

Year 1920 1938 1946 1950 1955 1960 1962 1963

Rafinerie 37 27 7 5 5 5 5 5

Oil processing 669 502 118 271 686 876 1293 1442

Products 608 481 108 254 656 848 1247 1415

Petrol 77 141 34 49 64 119 244 301

Kerosene 179 141 17 35 86 111 28 21

Diesel oil 215 66 26 54 260 207 352 705

Oils and greases 90 51 24 65 144 163 183 194

Paraffins 21 23 2 6 7 8 10 8

Asphalt – 29 8 51 101 119 146 186

Employment 5800 3250 2277 2859 3368 3350 3771 4004

Table 11.

Oil processing in Polish refineries

(thousands of tons).

Employment Total Office workers Manual Apprentices

Oil fields

1945 5280 393 4766 119

1946 6556 523 5907 126

1947 6791 575 6104 112

Earth gas

1945 246 74 174 8

1946 611 84 520 7

1947 535 87 441 7

Oil refinerie

1945 2405 171 2211 23

1946 2248 248 1952 48

1947 2470 226 2189 55

Total

1945 7941 540 7151 150

1946 9415 855 8379 181

1947 9796 888 8734 174

Table 12.

Level of employment in oil

companies in 1945-1947.

Employment Total Oil fields Refineries

1947 9.3 6.8 2.5

1970 13.2 3.5 9.7

1978 19.0 4.7 14.3

1980 19.4 4.5 14.9

1981 19.8 4.7 15.1

1982 19.9 5.1 14.8

1983 19.4 5.1 14.3

154

Table 13.

Average employment at oil fields

and oil industry in 1947-1983

(thousands of people).


Year 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959

Import

Oil 116.2 91.5 193.7 224.8 239.4 412.4 463.2 544.9 536.9 630.2 599.8 692.5

Import

Products 268.0 245.4 278.8 529.8 604.8 538.4 723.5 885.7 951.9 1156.5 1273.8 1497.4

Export

Diesel and heating oil 7.1 24.4 50.3 58.8 125.4 111.1 47.1 138.3 177.7

Export

Asphalt 19.1 20.9 28.3 25.9 25.6 24.7 4.0 – 5.4

Table 14.

Import of oil to Poland and export

of fuels after WWII.

Table 15.

Import share in the Polish volume

of fuels till 1970’s (%).

Year 1955 1960 1965 1970

National production 46 34 69 78

Import 54 66 31 22

Table 16.

Motorization development in

Poland 1973-1986.

Year 1973 1978 1983 1986

Mopeds 1 143 490 1 322 569

Motocycles 1 086 293 1 086 119 1 096 018

Passenger cars 696 218 1 689 597 2 974 297 3 615 336

Lorries 37 178 105 304 205 053 325 159

Farm tractors 90 483 212 014 495 567 620 000

Table 17.

Consumption of oil products

1979-1986 (thousands of tons).

.

Year 1979 1980 1983 1984 1985 1986

Oil products total 14 969 15 037 12 297 12 155 12 492 12 558

Petrol 3 309 3 308 3 092 2 838 2 781 2 918

Disel oil 5733 5664 5260 5508 5669 5741

Heating oil 4 207 4 054 2 729 2 600 2 790 2 617

Year 1950 1955 1960 1965 1970 1975 1980 1985

From Eastern Europe 151.5 524.8 713.9 3 215.6 7 010.7 10 882.0 13 100.0 12 725.0

From other countries 42.2 20.1 – – – 1 963.0 3 500.0 987.0

Total 193.7 544.9 713.9 3 215.6 7 010.7 12 845.0 16 600.0 13 712.0

Table 18.

Crude oil import (thousands of

tons) in the Polish People’s

Republic (PPR).

Table 19.

Import and export of oil products

in PPR (thousands of tons).

Year 1960 1965 1970 1975 1980 1985

Total import 1789.0 2248.0 2336.0 2351.0 3326.0 2625.0

From Eastern Europe 1786.0 2230.0 2170.0 1516.0 3212.0 2423.0

From other countries 3.0 18.0 166.0 835.0 114.0 202.0

Total export 223.0 1028.9 1315.9 – 1488.0 392.0

To Eastern Europe 17.7 34.8 104.7 – 14.0 13.0

To other countries 205.3 994.1 1211.2 – 1474.0 379.0

155


Year 1960 1965 1970 1975 1976 1980

Heating oil 43.2 642.8 726.3 1185.0 1674.6

To Eastern Europe 7.2 8.4 57.3 12.7 4.9

To western countries 36.0 634.4 669.0 1172.3 1669.7

Diesel oil 152.4 346.0 539.5 350.9 – 715.0

To Eastern Europe 4.9 4.2 9.8 13.4 – 10.0

To western countries 147.5 341.8 520.7 337.5 – 705.0

Table 20.

Export of oils from Poland

1960-1980 (thousands of tons).

Year 1971 1972 1975 1976 1977 1978 1979

Export of petrol 86.6 104.6 14.8 74.0 279.0 422.1 208.3

To Eastern Europe 6.0 – – – – – –

To western countries 80.6 104.6 14.8 74.0 279.0 422.1 208.3

Table 21.

Export of patrol from Poland in

1970’s (thousands of tons).

Table 22.

Oil processing and Import of

productsPPR (thousands of tons).

Year 1945 1950 1955 1960 1963 1965 1967 1970 1975 1978 1979 1980 1981 1982 1983 1984 1985 1986

Oil processing 90 253 656 876 1 442 1 516 4 097 7 470 13 515 16 970 16 617 16 126 13 585 13 382 13 634 13 629 14 046 14 278

Import of products 31 410 886 1 790 2 634 2 248 2 784 2 424 3 418 3 418 3 891 4 407 3 929 3 131 3 411 3 299 3 476 –

Year 1950 1960 1970 1974 1975

Plastics 1.5 7.0 30.2 44.6 38.5

Synthetic fibres 0.1 0.7 5.1 7.5 7.5

Synthetic Caoutchouc 0.7 2.0 5.9 7.7 7.4

Detergents 0.1 3.5 9.0 11.0 10.8

Total 3.0 13.2 50.2 70.8 64.2

Table 23.

World production of synthetic

goods (mln tons).

Year 1965 1970 1976 Comment

Ethylene 8 000 16 500 26 000 USA, West. Europe, Japan; others from 500 to 2700

Propylene 4 400 9 530 13 700 from 200 to 1600

Butadiene 1 900 3 130 4 890 300 1 400 -

Benzene 4 780 8 820 13 300 250 2 800 -

P-Xsylen 3 100 300 -

Table 24.

Production of main

petrochemicals (thousands of tons).

Year 1960 1965 1970 1974

USA 50 39 30 32

Western Europe 32 39 41 43

Eastern Europe 9 10 10 10

Japan 9 11 16 14

Others – 1 3 1

Table 25.

The share in world production (%).

Year 1995 1996 1997 1998 1999 2000

Oil 180.5 169.3 181.3 187.3 185.6 343.0

156

Table 26

Production of crude oil in Poland in

1990’s (thousands of tons).


Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Oil 242 284 292 317 289 357 425 653 759 730

Table 27.

27. Other data on

Other data on crude oil production

crude in Poland oil from production 1993 in

Poland to 2002 (thousands from 1993 of tons).

2002

(th. t.)

Table 28.

Import of crude oil to Poland

from 1994 to 2002 (mln tons).

Year 1994 1995 1996 1997 1998 1999 2000 2001 2002

Oil 13.2 13.6 14.4 14.7 15.4 15.9 18.0 17.5 17.0

Table 29.

Average annual price of oil on the

world markets (USD/ bll).

Year 1997 1998 1999 2000 2001 2002

Price 19.4 13.3 18.0 28.5 22.5 25.0

Table 30.

Production of petrol and diesel oil

from 1994 to 2002 (thousands of

tons).

Year 1994 1995 1996 1997 1998 1999 2000 2001 2002

Petrol 2941 3037 2984 3195 3360 4093 4435 4281 4030

Diesel oil 5087 5183 5277 5287 6031 6041 5531 5197 4400

Year 1994 1995 1996 1997 1998 1999 2000 2001 2002

Sale of petrols 3948 4195 4321 4886 5034 5773 5260 5031 4700

Sale of diesel oil 5614 5754 6413 6409 6554 6493 5766 5497 4800

Total 9 562 9 949 10 734 11 295 11 588 12 266 11 026 10 528 9 500

Import of petrols 1007 1158 1337 1691 1674 1680 825 750 800

Import of diesel oil 527 571 1136 1122 523 452 235 300 350

Table 31.

Sale and import of fuels (thousands

of tons).

Table 32.

Export of oil products in the first

3 quarters of 2002 (thousands of

tons).

Export PKN ORLEN Gdask Southern Total

Refinery

Refinery

Petrol 95.1 174.5 – 269.6

Diesel oil 120.8 141.1 – 261.9

Light heating oil – – – –

Jet fuel 13.2 192.4 – 205.6

Heavy heating oil 364.6 350.5 64.3 779.4

Heavy heating oil 593.7 858.5 64.3 1516.5


THE SPONSORS

Orlen Automatyka Sp. z o.o.

09-411 Płock ul. Chemików 7

tel. 0-24 365 33 50

Petro Eltech Sp. z o.o.

09-411 Płock ul. Chemików 7

tel. 0-24 365 83 00

Petro Mechanika Sp. z o.o.

09-411 Płock ul. Chemików 7

tel. 0-24 365 42 88

Petro Remont Sp. z o.o.

09-411 Płock ul. Chemików 7

tel. 0-24 365 51 88

Orlen Wir

Zakład Remontów Sprężarek i Turbin Sp. z o.o.

09-411 Płock ul. Chemików 7

tel. 0-24 365 26 77

Petro EnergoRem Sp. z o.o.

09-411 Płock ul. Chemików 7

tel. 0-24 365 88 94

Orlen Projekt SA

09-411 Płock ul. Chemików 7a

tel. 0-24 365 36 18


TABLE OF CONTENTS

PREFACE ....................................................................................................................................................................... 7

I. TIMES OF OIL INDUSTRY PIONEERS

Crude oil has been well-known since the oldest times ....................................................................................................... 7

“Father” Ignacy ukasiewicz (1822-1882) ...................................................................................................................... 11

The beginnings of oil industrial utilization in Galicia ...................................................................................................... 23

Other claimants to the victor’s palm............................................................................................................................... 25

Great works of Galicia pioneers ...................................................................................................................................... 25

The nineteenth century–world career of oil ..................................................................................................................... 39

Oil becomes indispensable... beginning of the 20 century ............................................................................................... 41

Oil and its role in World War I ....................................................................................................................................... 43

II. THE TWENTIES, THE THIRTIES...

The Second Polish Republic ............................................................................................................................................ 45

World’s vivid development after the horrors of World War I ........................................................................................... 53

New discoveries of big oil ............................................................................................................................................... 55

A lot of new technologies–for World War II? ................................................................................................................. 57

III. THE WORLD AFTER WORLD WAR II

After WW II rapid development again........................................................................................................................... 63

Poland after WW II ....................................................................................................................................................... 63

The world and its new technologies ................................................................................................................................ 67

World’s years of anxiety.................................................................................................................................................. 67

And in Poland... ............................................................................................................................................................. 69

New wave of innovations in the world ............................................................................................................................ 71

Cheap oil........................................................................................................................................................................ 73

The world growth of the petrochemical industry ............................................................................................................ 77

Polish beginnings of the petrochemical industry ............................................................................................................. 77

... and the golden age of refinery ..................................................................................................................................... 79

Oil Shocks”–oil weapon of oil producers ....................................................................................................................... 79

Poland at that time ... ..................................................................................................................................................... 81

The world after crisis ... oil concerns ............................................................................................................................... 83

...petrol stations ............................................................................................................................................................. 85

...refineries ..................................................................................................................................................................... 85

...ecology becomes priority ............................................................................................................................................. 87

Levelling of the development chances? ........................................................................................................................... 87

Is there a good energy policy? ........................................................................................................................................ 89

Regulated market .......................................................................................................................................................... 91

Twenty years earlier... than today–and afterwards .......................................................................................................... 93

The last decade and... .................................................................................................................................................... 93

...time for changes in Russia ........................................................................................................................................... 95

...and oil is still a strategic commodity ........................................................................................................................... 95

New quality of fuels and other environmental challenges ................................................................................................ 99

Contemporary times–the Third Republic of Poland ...................................................................................................... 101

The most recent years ... ............................................................................................................................................... 107

...in Central Europe...................................................................................................................................................... 109

...and the rest of Europe ............................................................................................................................................... 111

Mergers of great entities ............................................................................................................................................... 113

The world after a hundred years–where is it heading for? ............................................................................................. 115

Several impressions–memento for the future ................................................................................................................. 117

BIBLIOGRAPHY ........................................................................................................................................................ 121

IV. FROM THE MAZOVIAN REFINERY AND PETROCHEMICAL WORKS

TO POLSKI KONCERN NAFTOWY ORLEN SA

A rich though not very long history of one oil company ................................................................................................ 123

Introduction................................................................................................................................................................. 123

Reasons and beginnings, characteristic general features................................................................................................. 123

Feed stocks, products and engineering processes in the Pock Complex ......................................................................... 127

The period of transformation has radically changed the company.................................................................................. 135

Polish Oil Company ORLEN, joint stock company ....................................................................................................... 139

Company as a complicated organism ............................................................................................................................ 147

BIBLIOGRAPHY ........................................................................................................................................................ 151

V. TABLES ....................................................................................................................................................................... 152

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