Kommersant quoted sources close to negotiations as saying that Russia largest oil company Rosneft and US major Chevron Corp may break up their partnership on a joint development of the Val Shatskogo deposit on the Black Sea shelf as they fail to agree on terms of cooperation.

Chevron is on the final stage of preliminary geological survey and is most likely to declare that the field contained no commercial oil reserves. Rosneft and Chevron declined to comment.

Kommersant said that Rosneft insisted that the joint venture should be registered in Russia which Chevron does not like. The companies cannot choose a court where possible disputes are to be settled. Chevron is also unhappy that it cannot choose contractors and there are problems with the project funding scheme.

A Kommersant source said "There are a number of issues which, together with the reserves data, may push Chevron out of the project."

Rosneft and Chevron agreed to work on the Val Shatskogo last June when they signed a preliminary agreement in the presence of Prime Minister Vladimir Putin. Chevron has committed to investing USD 1 billion in geological survey.

A final decision will be taken on March 26 in Moscow. Kommersant quoted its sources as saying that Chevron had proposed Arctic shelf projects to Rosneft instead of Val Shatskogo.

(Sourced from Kommersant)