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To: Alex who wrote (30255)	3/17/1999 6:31:00 PM
From: Mark Kubisz	Respond to of 116764

Excerpt from "U.S. stocks fall; no 10,000 for Dow' (Reuters): "In economic news, the Federal Reserve said the nation's economy still gained strength as 1999 began, but wage demands were on the rise in strained labor markets." Also, the first paragraph in "U.S. Economy Still Gaining - Fed": "There were increasing signs that wage pressures were mounting as companies scrambled to find workers in a still-growing economy at the beginning of 1999, the Federal Reserve said Wednesday." Sooner or later, these wage demands will have to cause inflation. (Italics mine) Full stories at dailynews.yahoo.com and dailynews.yahoo.com

To: Alex who wrote (30255)	3/17/1999 8:41:00 PM
From: goldsnow	Respond to of 116764

ANALYSIS-Azeri oil boom dream runs into trouble 06:17 a.m. Mar 17, 1999 Eastern By Lawrence Sheets BAKU, March 17 (Reuters) - When Azerbaijan sealed its first big oil development contract with foreign firms half a decade ago, President Haydar Aliyev hailed it as ''the starting point of our great journey.'' ''Today is a historic day in the life of Azerbaijan,'' he said on September 20, 1994. ''All the wishes and hopes of Azerbaijan are reflected in the documents which are to be signed.'' That first deal, the so-called ''contract of the century'' worth as much as $12 billion in long-term investment, set into motion a stampede by foreign firms for a piece of the action, and raised expectations that the poor former Soviet republic, ravaged by instability and war with neighbour Armenia, was on the verge of striking it rich. Communist planners had relegated Azerbaijan, along the Iranian border, a back seat to big Siberian oil projects for decades. Now it seemed all but certain that Baku, which at the turn of the century produced half of all world crude and was the haunt of oil barons like the Rothschilds and Nobels, would reclaim its status as a major oil power. In just the last few short months, that ''great journey'' has run into a roadblock, stymied by low oil prices and disappointing test drilling results. The euphoria which existed just a year ago has given way to a more sober reality. Few industry insiders dispute that Azerbaijan's Caspian Sea shelf may possess big reserves of crude oil and natural gas. But the expensive nature of the projects and the lack of ready infrastructure to exploit and move them to world markets make the Caspian one of the world's riskiest investment areas. One consortium led by Pennzoil of the United States. has already left the country, nullifying $3 billion in potential investment. Another group led by BP Amoco, which would have sunk $2 billion into the country, will pull out officially in April, consortium sources say. Both were the victims of disappointing test drilling results. Officials at a third, headed by Russia's LUKoil LKOH.RTS, have hinted that only a very large crude oil find would save it from shutting down later this spring. Even the ''contract of the century,'' the BP Amoco-led Azerbaijan International Operating Company (AIOC), has run into harder times. AIOC has had to delay the next big stage of its investment plans because of lower prices. Cost-cutting measures have included everything from limiting the use of mobile telephones by staff to making the company president fly economy rather than business class. AIOC, with a modest current output of 100,000 barrels per day, is still the only one of over a dozen consortiums actually producing oil. The rest are only in the early stages of exploration and most are years away from production, should it prove viable. Oil is still Azerbaijan's only solid source of income. It was to be the engine which would power its economic development. Aliyev and his aides even as late as last year were still counting on quick oil revenues to rebuild an army humiliated on the battlefield at the hands of ethnic Armenian forces who now control 20 percent of the country's territory. But last year's low oil prices for output from the country's creaking, Soviet-built production sites were reckoned to have cost Azerbaijan $155 million. Industry officials are careful to emphasise that Azerbaijan is still an attractive long-term oil prospect. They warn that just as the euphoria of the early days was probably overblown, so are the grim predictions that maybe everything was a mirage. It is now certain, however, that there will be no quick riches, no economic miracle to suddenly propel the country, flooded with hundreds of thousands of refugees from the conflict over the disputed mountainous Karabakh region, to prosperity. Copyright 1999 Reuters Limited