ChevronTexaco, the second largest U.S. oil producer, will boost its investments in energy-rich Russia, praising the government for its economic reforms.
Caspian Sea region would provide up to 10 per cent of ChevronTexaco's global oil output in the near future.
Company would wait for the Russian government to sign an appropriate production sharing agreement before it decides to invest billions of dollars in the Sakhalin-3 project together with U.S. oil giant ExxonMobil.
Russia's plan to entry into the World Trade Organisation (WTO), possibly by late next year, was also a positive step.
That will make Russia a much more attractive and competitive location for investment of all types, not just in oil and gas business.
The world's fourth largest oil firm has put significant investment into the Caspian Sea region, where it is developing the giant Tengiz oilfield and participating in the Karachaganak field in the former Soviet state of Kazakhstan.
It is also leading an international consortium which since last year has been operating a 600,000 barrels-per-day pipeline from Tengiz to the Russian port of Novorossiisk - the first private oil pipeline built in either Kazakhstan or Russia.
In Russia, ChevronTexaco inherited Texaco's 1993 deal with local state firm Rosneft and ExxonMobil to develop the Kirinsk block of the Sakhalin-3 project, estimated to contain 4.5 billion barrels of oil.
While neighbouring Sakhalin projects already produce oil or have completed the exploration stage, Sakhalin-3 has been stuck for almost a decade awaiting more attractive production sharing terms. O'Reilly said he expected work to speed up.
Russia tries to boost oil supplies to world markets and help the West cushion risks against world's oil market volatility.
There is a considerable progress not only by the Russian government but also by the U.S. government in supporting the concept that energy dialogue and energy security is an issue of bilateral importance.
Russian oil output has grown four years in a row and the country's oil firms have said they could ship large volumes of crude to the United States, encouraged by political rapprochement between Moscow and Washington after the September 11 attacks in the U.S.