The fame of Baku as a new industrial revolution capital started with strong fountains of oil in 1872 in the outskirts of the villages of Balakhani, Sabunchu and Ramana. Within few years oil-bearing parts of Absheron turned into densely populated regions. More than hundred wells were drilled and on the first stage up to forty small firms functioned in the outskirts of Balakhani. The sharpest problem of oil industrialists of that time was the transportation of oil from Balakhani to Baku. In 1877 a pood of oil cost 3 cents and its transportation to the city cost 20 cents.
Yet in 1863 the professor-chemist Mendeleev recommended to build oil pipeline during his visit to Baku, but the volume of production was not big then and that’s why the proposal was never realized. In 1877 this problem became so urgent that the owner of the pipeline from Balakhani to Baku almost became a monopolist of oil-bearing regions of Absheron. The initiators of building pipelines were Nobel brothers and they got the concession for its construction with their own means.
The cost of oil transportation decreased ten times. Virtually, the first oil boom started at the moment when the first pipeline Balakhani-Baku was launched. The construction workers of Balakhani pipeline gained priceless experience, which allowed them to realize the most pretentious project of the beginning of XX century in Russian empire – the construction of 833 meter long pipeline Baku-Batumi in 1906. It took 10 years to build it. Formation of strong oil industry of Azerbaijan started with the restoration of Balakhani oil fields in 1920.