Oil Lights The Way

The success of the PSA projects blooming off Sakhalin's coast has not been lost on the people trying to balance Russia's national finances. After all, taxes on oil and natural gas provide more than half the state's revenue. Last September, President Putin made a stopover in Sakhalin on his way to Japan to put his personal stamp on the area's success. With Bill Richardson, then U.S. Secretary of Energy, in attendance, Putin vowed to smooth the way for the dozens more PSAS still in limbo. He even instructed his Economics and Trade Minister, German Gref, to take charge of the state's role in developing and supervising the arrangements. Later that month Russian Prime Minister Mikhail Kasyanov journeyed to London in hopes of luring more Western energy companies into the market. Western investors, ever wary of Russia's unbridled market, welcome Putin's entreaties. Many, however, are waiting to see words turn into deeds.

In the Duma, the lower house of parliament, elected representatives still complain that the West only wants to pillage the country's riches. And on Sakhalin itself, the impact of the new oil boom is still negligible. Power blackouts are frequent and hot water is scarce; the local population of hunter-gatherers pays the highest prices for gasoline in Russia. But now, at least, there is muted hope that a century's worth of frustrated promise may finally be at an end.