The company holding a $1.1 billion synfuel project government loan guarantee for one of the nation's largest synfuels projects has limited understanding and no control over project costs, according to reports prepared for the Department of Energy.

The reports, prepared last month, describe the design of the Tosco-Exxon Colony Shale Oil Project as much sketchier than it was said to be when the government approved the loan guarantee for The Oil Shale Corporation, a Tosco subsidiary. Cost estimates, based on the project design, have been escalating upward, raising questions about Tosco's ability to finance cost overruns.

The loan guarantee is almost as large as the $1.2 billion government loan guarantee granted Chrysler, the largest government guarantee ever approved for a corporation.

The government's Synthetics Fuels Corporation is already facing considerable opposition in Congress where a bill was introduced yesterday to take away most of its authorized funding and another bill has been introduced to disband it. The SFC's difficulties are likely to be compounded by its problems with this loan guarantee.

"Although Tosco put many years and many millions of dollars into developing the most advanced oil shale project in the country, it is clear now that even this sizable investment did not guarantee reasonable certainty of costs or design," Rep. Toby Moffett (D-Conn.), chairman of the House environment, energy and natural resources subcommittee, said last week.

Since the guarantee was granted, Tosco has raised its own estimates of the cost of the project 19 percent from $3.1 billion to $3.7 billion, and Exxon has indicated the project will cost closer to $5 billion. Last Friday, calling the potential cost overruns "a very serious situation," the Synfuels corporation threatened to take away the federal loan guarantees.

The corporation asked Tosco for updated cost estimates and assurance that there is adequate security for the loan guarantee. The DOE reports suggest, however, that Tosco's ability to respond to that list is limited because of the company's limited role in the project. Exxon, which is not a party to the loan guarantee, owns 60 percent of the project and controls its design, cost, construction and operation.

"During the recent period of involvement with the Colony Shale Oil Project, it became apparent to the Denver-DOE staff that Oil Shale is being treated as a junior partner even though it is contributing more than $1 billion to the project," according to a confidential report prepared in February by that staff.

"Oil Shale must become a more active owner and participant in the Colony Shale Oil Project in order to fulfill the requirements of the loan guarantee agreements as approved by the government and Oil Shale," the report concluded.

Tosco Vice President for Public Affairs Walter Klein called the characterization of Tosco as a junior partner on the sidelines as "just nonsense." Tosco Executive Vice President John Lyon said that Tosco had a better working relationship with Exxon than with previous participants in the project.

Klein said the DOE reports had not been provided to Tosco. From what he had seen, he said, the portions of those reports that had to do with cost estimates "appear to be garbled."

"There are alot of things that are just overblown at this point," he said. "We also think that as time moves along, all these perceived problems will be taken care of." Klein noted that Exxon and Tosco had begun work on the project before the loan guarantee and that an estimated 1,600 people are employed by the project. He also questioned where the cost estimate purported to be Exxon's had come from.

Another report, prepared for DOE by Black & Veatch, a consulting engineering firm, concluded that Exxon's higher cost estimates were more accurate.

"They (Exxon) have the ability to adjust the project to meet whatever budget they establish for themselves. Tosco does not appear to have direct control of any of the cost-affecting responsibilities. They do not have detailed information on cost increases to date due to Exxon revisions and are not privy to further changes contemplated by Exxon."

"Therefore," the report went on, "the Tosco estimate of $3.7 billion is considered an effort to temper the dollar values generated by Exxon to cover future modifications and Tosco is not in a position to hold down costs to meet a budget."

An Exxon spokesman said yesterday that Exxon has not submitted any definitive cost estimates based on detailed design to the goverment. Those figures will not be available till the end of 1982, he said.