Russia's Latest Oil Gusher.

It's amazing who you meet on the flight to the oil-boom island of Sakhalin. Sakhalin Airlines is packed with opportunity hunters like Jeetendra Khemlani of Mumbai, future manager of the island's first Indian restaurant, the Taj Mahal, due to open this month. "Our clientele will mainly be ex-pats of course," says Khemlani, 30. "But as the restaurant becomes better known and Yuzhno grows, we should get more and more Russian customers." And if they don't, who cares? Besides Moscow and St. Petersburg, Yuzhno-Sakhalinsk, the island's capital, now has the highest concentration of non-Russians in Russia: one for every 18 locals.

Until recently Sakhalin Island was perhaps best known for the Anton Chekhov book of the same name. Now the 569-mile-long isle is the center of one of the most concentrated oil and natural-gas booms in decades, as well as a heated Russian debate over who will get the spoils: locals or multinationals. Off the island's blustery eastern shores lie oil and gas fields that, based on rough new estimates, could prove to be among the richest in the world; oil giants including ExxonMobil and Shell plan to spend $10 billion over the next decade and as much as $50 billion over the next 30 years. "For a while, the talk was all about the Caspian," says David Victor of Stanford University's program on energy and sustainable development. "Now Sakhalin is the big play."

Oil money is transforming the island of 600,000 people in one of Russia's most backward regions. Sakhalin's governor, Igor Farkhutdinov, says foreign dollars are expected to double to $1.3 billion this year. You can hear the sound of money in the laughter of drunk expats gathered at the bar of the downtown Sakhalin Sapporo Hotel--in the enthusiasm of a 22-year-old Russian translator working at the site of a new Exxon rig, in the voices of foreigners paying up to $6,000 a month for modestly refurbished apartments in downtown Yuzhno-Sakhalinsk.

But others don't hear the money. "I don't see much benefit to Sakhalin and the community, at this point or later," says Tai Mak, an engineer from California working on an airport, apartments and other projects for ExxonMobil. Mak's own apartment rents for $3,500. "But the maids or receptionists in the ...