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OPEC as Omen

Courtesy Reuters

A WARNING TO THE CASPIAN

With the breakup of the Soviet Union in 1991, four new states emerged on the edges of the Caspian Sea, endowed with oil and gas reserves estimated to be worth between $2.5 trillion and $3 trillion at today's prices. The full extent of the subterranean energy resources of these countries -- Azerbaijan, Kazakstan, Turkmenistan, and Uzbekistan -- is still unknown, but by all accounts their mineral wealth is the largest find in three decades. Still, the nascent republics' current energy production is relatively minuscule. They are thus eagerly soliciting foreign capital and modern technology to exploit their reserves and are believed to need some $50-70 billion of foreign investment during the coming decades.

The economic boom that will inevitably follow such an enormous bonanza promises to mimic, in many respects, the plight of the members of the Organization of Petroleum Exporting Countries in the mid-1970s and after.

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