U.S. Synthetic Fuels Corp. has given Tosco Corp. until the end of the year to produce revised cost estimates of the company's government-backed oil shale project.

Reported cost overruns as high as $2 billion prompted Synfuels Corp. to threaten last month to end the government guarantee unless Tosco produced satisfactory answers to questions about costs and about security backing the loan.

Tosco and Synfuels Corp. reached a tentative agreement for the government agency to provide "bridge financing" and to allow Tosco to continue to draw against its government-guaranteed $1.1 billion loan. In return, as additional security, Synfuels Corp. may force Tosco to sell part of its 40 percent interest in the project to Exxon, the other partner in the venture.

The agreement is expected to be put in final form and signed in approximately two weeks.

"We have made satisfactory progress toward our ultimate goal of strengthening the project and, at the same time, protecting the taxpayers' interest," said Synfuels Chairman Edward Noble.

Tosco President Morton M. Winston said the agreement would help SFC and Tosco reach a longer-range agreement on how to evaluate the progress and costs of the project. The project, if completed, will be the nation's first full commercial-scale oil shale production facility, producing approximately 47,000 barrels a day of shale oil in western Colorado.