According to Rosneft industry sources, Chevron will take a roughly 30% stake in its Black Sea oil venture with Russia largest oil producer.

A source familiar with the details of project said "The ownership structure will be around one third Chevron, two thirds Rosneft."

Last month, Chevron and Rosneft signed an agreement to jointly explore and develop the Val Shatsky field on the Black Sea shelf, a deep-water region that analysts say presents major geological difficulties. At the signing, Mr Igor Sechin Deputy Prime Minister said initial exploration investment to be financed by Chevron would amount to USD 1 billion.

A source who has seen the agreement papers however, said the figure was likely to be lower.

The US Company was not immediately available for comment.

Another source in the oil industry familiar with the terms of Rosneft offer said that in his opinion a one-third equity stake in the holding company was not commensurate with the hefty investment outlays and the project high risk level.

The license area of 8,600 square kilometers, in the eastern part of the Black Sea has a maximum depth of 2,200 meters which is considered difficult for deep water drilling.

Mr John Watson CEO of Chevron underscored the issue of speedy cost recovery with Prime Minister Mr Vladimir Putin who presided over the signing ceremony between the companies.

He said that "It is a highly prospective area; it does have geological risks and high costs. We will need to work closely with the government to ensure that proper fiscal terms are in place to allow this project to develop rapidly."

Oil industry profits are heavily taxed through the mineral extraction tax and the oil export duty, but firms operating difficult projects have in the past successfully lobbied for tax breaks.

(Sourced from http://www.themoscowtimes.com)