OREANDA-NEWS. June 01, 2010. The largest Ukrainian oil company Ukrnafta <UNAF UK HOLD> sold 175.685 ktones of offered oil through an additional auction on Ukrainian Stock Exchange at the starting price of UAH 4690 per ton (USD 77.97 per bbl). Thus, compared with the previous auction held on 22 April, the average oil price increased by 39.24% to UAH 4693.95 per ton (USD 78.04 per bbl). Compared with the previous auction (on 26 May), the starting price decreased by 17.43%. The 26th of May auction did not take place due to lack of bids, therefore an additional auction was announced for the 31st of May. If this additional auction fails to go through, all the oil would be sold to NJSC Naftogaz at the starting price.

Millennium Capital: undoubtedly, it is good news. On the 31st of May, the first auction was held in conformity with the new rules specified in the 2010 State Budget Law. According to this law, the starting price for oil and gas condensate should be formed on the basis of customs value for oil over 15 days prior to bids registration date. Also, a premium is expected to be added for oil quality. Millennium Capital considers that such government initiatives will help Ukrnafta to increase its profitability up to about 25% by the end of the year.