OREANDA-NEWS. October 29, 2009. Rosneft CEO Sergey Bogdanchikov was quoted by mass media sources as saying that oil output at the Vankor field is expected to be 11.5-13.0MMt (230-260MBD) next year. This represents a somewhat stronger volume growth at Vankor than Rosneft’s earlier guidance (increase in crude output by about 7MMt in 2009) had implied. We expect Rosneft to produce about 3.2MMt of crude at the Vankorskoye field this year. The new 2010 guidance (11.5-13.0MMt) implies an increase of 8.3-9.8MMt over 2009, reported the press-centre of OTKRITIE Financial Corporation.

View: In our opinion, the news represents a minor positive for Rosneft, taking into account that incremental volumes will not be subject to the mineral extraction tax or to export duties. Balancing this, we think, is yesterday’s Interfax report, according to which the Russian Federal Antimonopoly Service (FAS) fined Rosneft for alleged past monopoly pricing practices regarding motor fuels. The fine reportedly was RUB5.28bn (over US180m, at the current exchange rate). Rosneft said it would “study the FAS decision”.

Action and valuation: Our valuation and target price for Rosneft is under review.