It turns out that the Nobel family was developing oil in the Caucasus area and doing so very successfully. One of the brothers, Ludwig, largely the one leading the company, unexpectedly died. When his obituary was written up, a mistake was made, and the papers thought it was one of his younger brothers, Alfred. All the obits focused on his development of dynamite, and were very critical of him, and the part he played in enhancing war and death.
Alfred, getting that rare chance to see what people say about him before he died, was upset at the way he was perceived to the world. And so, Yergin explains, he went and rewrote his will, and gave his fortune to the prizes that now bear his name, honoring the best of mankind.
And so it was from that mistake that the Nobel Prize was born.