RPT-Russian oil competes despite flat output-investor

(repeats story moved late Friday)

LONDON, April 25 (Reuters) - Russian oil output may stay flat but offers a competitive return as global oil companies face the rising cost of developing tougher, less accessible fields, an owner of Russia's No. 3 oil company said on Friday.

"It's true production reached its peak. It's true we might not see the same rate of growth," said Viktor Vekselberg, a major shareholder in BP's (BP.L: Quote, Profile, Research) Russian oil venture.

"But we will see production on the same level. Maybe it will decline a little, a few percent. But nothing catastrophic."

Russia's oil output dropped one percent in the first quarter of this year, though the oil minister said this week it would pick up and rise one percent for the full year.

A progressive tax on incremental profits from a rising oil price has reduced the funds available for re-investment in Russia's oil sector, though the government has proposed reductions in the tax take which Vekselberg called a step in the right direction.

TNK-BP has said the industry would turn free-cash-flow negative by 2011 if taxation levels remained unchanged.

But as the cost of tapping new oil resources rises around the world, Vekselberg said Russia remained competitove.

"Russia has big potential. It requires large-scale investment but if you compare it to cost world (oil industry) leaders bear to develop offshore fields... Russia is no worse." (Reporting by Melissa Akin)