Alfred Guliyev stands back to admire the new-look Villa Nobel, a mansion getting a makeover as this Caspian capital -- one of the world's oldest oil towns -- ramps up for another boom.

"Baku's reborn, and soon we'll be swimming in riches," said Guliyev, the house's caretaker.

Villa Nobel, built in 1885 when Baku first tasted oil riches, sums up Azerbaijan's shifting fortunes. Under the Soviets, the mansion stood in ruins. Now, with Azerbaijan about to strike it rich again, Villa Nobel's $3 million facelift reflects the hope sweeping the country.

A consortium led by BP PLC soon will be pumping 1 million barrels a day from a big offshore field, and will send the oil through a new $4 billion pipeline from Baku to Turkey's Mediterranean port of Ceyhan. From the moment the first cargoes are loaded early next year, Azerbaijan will face a tidal wave of cash.

"By 2010, the revenues could be twice the country's current [gross domestic product]," said David Woodward, president of BP's Azeri unit.

Azerbaijan's economy will grow 20 percent this year, according to most estimates. But unlike many of today's emerging oil powers, Baku has seen it before. Its landscape is littered with the detritus of past oil crazes: Along with faded gems like Villa Nobel are forests of Soviet derricks still standing by the Caspian, rusting amid pools of black sludge.

And there is concern that, if the imminent wave of oil wealth is mismanaged, Azerbaijan's latest boom could end in yet another bust.

"We have the chance to create a new Norway, a democracy based on the rule of law. Or we'll just end up like Nigeria," said Eldar Namazov, a former Azeri presidential aide now in the opposition, comparing two nations whose oil riches have led them down starkly different paths.

Azerbaijan assures the money won't be squandered. A state oil fund has been created, which diplomats call Azerbaijan's best-run institution. It is externally audited every year, under the Extractive Industries' Transparency Initiative, a British government program Azerbaijan signed up with in 2003.

But it is unclear what the country will do with the windfall. "The biggest issue is how much of this are they going to spend, and how sensibly are they going to spend it," said Basil Zavoico, the International Monetary Fund's representative in Baku.

Already, the government has alarmed economists by decreeing a 70 percent increase in next year's budget. The worries are compounded by Azerbaijan's reputation for corruption. It has been ruled for more than a decade by the same family -- first by Heydar Aliyev, a former Soviet-era KGB boss, and by his son Ilham since 2003. The economy is dominated by state monopolies run by the president's cronies. Any big boosts in government spending, it is feared, will benefit only Aliyev's friends.

"This parliament will not be able to control the oil revenues," said Ali Kerimli, a leader of the opposition Freedom bloc. "The president will decide everything."

Villa Nobel, despite its makeover, offers a cautionary tale. The house dates back to the city's heyday in the late 19th century, when half the world's crude flowed through it.

The villa housed the expatriate staff of the Nobel family -- best known for the prize bearing their name -- which then controlled much of the Russian oil industry.

But from early on, the Nobels' interests were threatened by revolution.

Radicals, including Josef Stalin, organized strikes. In 1905, rioters burned down hundreds of oil wells, and production never recovered. By 1914, Russia's share of the global market dropped to 9 percent.

In 1920, the Bolsheviks nationalized the oil industry. The Nobel family fled and their villa was confiscated. For decades it was an orphanage, and since 1985 has stood empty.

Baku, too, languished. The Soviets lacked the expertise to exploit its offshore fields, and investment was funneled to easier projects in western Siberia.

Hope returned in only the mid-1990s, when a consortium of major Western oil companies signed a deal with newly independent Azerbaijan to develop its oil riches.

Yet the country's poor don't expect the boom to improve their fortunes. "Ilham and his people will just put all the money in their pockets," said Ali Ismailov, an unemployed worker. "There'll be nothing left for us."

An Azeri man prays with oil rigs in the background. A new pipeline west promises to bring Azerbaijan a new oil boom.