OREANDA-NEWS. October 05, 2009. Oil output in Russia rose 0.6% YoY for the period January-September 2009, amounting to 368m tons (9.9m bpd). Domestic oil production reached 125m tons (9.92m bpd) in 3Q09, a 2% QoQ increase.

View: Although 9M09 incremental YoY oil production was marginal (less than 1%), it should be noted that LUKOIL, TNK-BP Holding and Rosneft posted higher production growth rates than did the overall industry. This is chiefly a function of the oil extraction at greenfields by LUKOIL and TNK-BP and the commissioning of Rosneft’s Vankor oil field.

In September, domestic oil output exceeded 40.95m tons of oil (9.96m bpd) due to the commissioning of the Vankor oil field. This figure is close to a psychologically meaningful for the oil industry level of 10m bpd, the highest result in the past 17 years. We believe that if 4Q09 is as successful for the oil industry as Q3, FY09 domestic oil production could rise 0.5% YoY to 490m tons (9.8m bpd), outpacing our forecast of 487m tons (9.74m bpd). According to our estimates, Rosneft could add 7m tons to Russia’s overall oil output before year’s end thanks primarily to Vankor.

Action: We read this news as a short-term positive for Rosneft’s stock, as strong 3Q09 upstream performances could positively impact on its Q3 US GAAP financials.