Chevron Agrees to Oil Venture With Soviets

Chevron Corp. said Monday that it has reached a tentative agreement with Moscow on a joint venture, worth potentially more than $1 billion, to pump oil in the Soviet Union.

An authoritative oil journal, however, said the deal still has a major hurdle to clear.

“The negotiations have been concluded on the terms of the joint venture. The approval process is in the hands of the Soviet governments,” said Richard Matzke, president of the Chevron Overseas Petroleum Inc. subsidiary in San Ramon, Calif.

“The terms of the joint venture have been agreed on between Chevron and negotiators of the Kazakh and Soviet governments. It now needs to go above those negotiators up the Soviet chain of command,” he said.

But the Petroleum Intelligence Weekly newsletter reported that the twice-delayed deal was being held up by Moscow’s conservative Gosplan planning committee for better terms.

“The future of the deal has now been placed directly in the hands of President Mikhail S. Gorbachev,” the newsletter said.

Through a spokesman, Matzke said he had no knowledge of whether the report was true because it involved “internal Soviet information.”

A spokesman for the San Francisco-based oil company said the 50-50 venture to drill in the huge Tengiz oil field near the Caspian Sea in the Kazakh Republic has an estimated value “well in excess of $1 billion over time.” He added: “We’re talking about a deal that could go on over decades.”

He said the Soviets estimate that the Tengiz field contains 25 billion barrels of oil. Using the industry’s rule of thumb, about one-quarter of this--more than 6 billion barrels--would be recoverable, the spokesman said.