OREANDA-NEWS. On October 4, TNK-BP oil company issued its first interim report in accordance with US GAAP requirements; first report covers first a half of 2007. According to the report, TNK-BP Holding's (TBH) net profit totaled 2.146 bn USD.

In the opinion of Veles Capital experts, the most important structural change to affect group's financial results was sale of Udmurtneft, which took place August 2006. 2006 Results reflect profit from the sale in the amount of some 1.8 bn USD and primary activity profit, which formed 0.3 bn USD through 8 months 2006.

During 1H 2007, when price conditions were slightly worse than during 2006, Urals barrel average price made up 59.8 USD, 2.5% below the average value of 2006, when the average price amounted to 61.3 USD per barrel. Extraction oil and condensed gas formed an average of 1 455 th barrels per day (total of 35.0 mn tons) throughout first half 2007. This value is 107 th barrel per day below the results of 1H 2006 (1 562 th barrels per day, including 122 th barrels per day by Udmurtneft, before its sale). Excluding sale of the given asset, the extraction rate upped by 1%.

The company paid extra attention to support of the extraction at mature deposits, where an expansion program for downhole and geological-technical works was conducted. Growing costs always accompanying such works led to a decrease of net profit by approx. 0.2 bn USD.

Veles Capital's analysts evaluate the given report as generally positive, but, when comparing those values with results of direct rivals, point out that company is not the winner, losing on sales per a single ton of extraction oil approximately 1.5-2 times; they relate this to company's low level of oil processing which forms 36-38% of total extracted oil. Due to that, company shows virtually humble financial results, considering the high level of extraction. "We think that effectiveness of the company was negatively affected by the ruble's reinforcing  to US dollar, leading to the growth of ruble costs in the US dollar measure. Besides of that, company's business was highly affected by industrial inflation related to the growth of service companies prices, being the background of rising oil prices. Overall, we have a positive vision of the company," the experts summarize.