Kashagan is the sole "superfield" to be discovered in the last three decades. The total Kashagan Contract area covers more than 2,125 square miles of northern Caspian Sea waters and contains five separate fields -- Kashgan, Kalamkas A, Kashagan Southwest, Aktote and Kairan.

Under terms of the North Caspian Sea Production Sharing Agreement signed in 2001, Italy's Eni under the joint-venture company name of AgipKCO (Agip Kazakhstan North Caspian Operating Co.) currently manages Kashagan. AgipKCO consists of Kazakhstan's national hydrocarbon concern KazMunaiGas and Japan's Inpex, both of which originally held an 8.33 percent share in the project, while ConocoPhillips holds a 9.26 percent share. Four major foreign oil companies currently dominate the project -- Eni, France's Total, U.S. ExxonMobil and Anglo-Dutch Shell, which all held 18.52 percent stakes each.

Last autumn, however, the Kazakh government, citing environmental concerns and cost overruns, renegotiated the PSA agreement. When the dust settled in January, KazMunaiGas increased its share in the Kashagan project from 8.33 percent to 16.81 percent as a result of its foreign consortium partners surrendering 2 percent apiece of their stake while agreeing to pay up to $5 billion as compensation for lost profits due to cost overruns and significant delays in commercial production.

Initial production from Kashagan is estimated to begin in 2011, with a projected daily output of more than 500,000 barrels per day, the same year when many analysts believe that land-based Kazakh production will peak, while Caspian offshore developments, most notably Kashagan, then begin to surge to first supplement and then increasingly replace onshore production. What is indisputable is that Kazakhstan will play an ever-increasing role in global oil production, a fact that is reflected in production figures.

While Kazakhstan currently exports approximately 1.2 million barrels per day, projections estimate that by 2021 Kazakhstan could be pumping nearly 4 million barrels a day, a rate that would put it only slightly behind Organization of Petroleum Exporting Countries member Iran and its daily production of 4.5 million bpd.

Almost as interesting as Kazakhstan's rising oil production is what the government has done with its revenues, which, along with nearly $40 billion foreign investment in its energy sector, have allowed it to shake off most vestiges of its Soviet heritage. Among Kazakhstan's "firsts" among its Commonwealth of Independent States neighbors: In 2000 Kazakhstan was the first to pay off its International Monetary Fund debts following economic reconstruction, seven years ahead of schedule; the first "Stan" to obtain a favorable credit rating, the first to implement financial institutions approaching Western standards of efficiency and reliability, and the first to develop and introduce a national fully funded pension program.

In validating the structural reforms carried out by the Kazakh government with its oil revenues, the European Union formally recognized Kazakhstan as a market-based economy in October 2000, while Washington accorded Kazakhstan similar recognition in March 2002. The creation of a prosperous and stable middle class has been a high priority of Kazakh President Nursultan Nazarbayev, who said a decade ago, "First and foremost, the state must represent the interests of the middle class," a statement that certainly sent Vladimir Lenin spinning in his mausoleum on Red Square.

Perhaps the most dramatic proof of the "trickle down" effect of oil revenue has been the dramatic drop in the nation's poverty: According to U.N. figures, Kazakhstan halved its poverty rate in just five years, which fell from 5 million, or 39 percent, in 1998 to 3 million, or 20 percent, in 2003, the lowest poverty rate among the "Stans."

The foreign consortium partners remain deeply unhappy about revisions of the Kashagan joint venture contract terms; however, a little introspection seems in order.

Seven years after the PSA was signed, many things have changed, not least the price of a barrel of oil, which then hovered around $20. Kazakhstan is not the only nation to complain about international oil companies' rapacious and hard-nosed negotiating tactics, with their lawyers determined to squeeze maximum advantage from host governments. Besides Kazakhstan, many governments, including Bolivia, Ecuador, Venezuela and Russia, appalled by such buccaneering tactics, have taken steps to reassert national control over their hydrocarbon resources.

When oil was still at a relatively low bargain price of $60 a barrel, analysts estimated that Kazakhstan's oil could generate up to $96 billion over the next two to three decades. As oil is now over $120 per barrel, future Kazakh revenue projections would rise accordingly, prompting most disinterested observers to ask, "Is 16 percent, instead of 18.52 percent, of $192 billion really such an iniquitous profit?" The millions of Kazakhs lifted from poverty by government social programs along with pensioners funded by oil revenues can certainly answer that question, as can millions of American motorists facing $4 a gallon gas.

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