The Scramble For Oil's Last Frontier

It was a hot summer morning on Aug. 19, 1991, at Kenneth T. Derr's mountain home in Lake Tahoe. Getting up early, the Chevron Corp. chairman flipped on the TV and watched with horror the scenes of Soviet Army tanks rumbling into Moscow. Hearing that Soviet President Mikhail Gorbachev was under arrest by hardliners at his dacha on the Black Sea, Derr turned to his wife and ruefully remarked: "Well, I guess we can quit worrying about our damn Soviet deal."

That marked the darkest moment in Chevron's four-year effort to land Tenghiz, the biggest oil field to come up for grabs in more than two decades. Chevron's struggle to capture Soviet black gold reads more like a chapter out of a Russian novel than a business school case study. But it provides a glimpse of how a company managed to snatch a rich prize even as the Soviet Union collapsed amid mounting economic and political chaos. "It was like negotiating a deal on the front page," gripes Derr, 56, a tall, stocky Pennsylvanian who has been with Chevron since graduating from Cornell University.