OREANDA-NEWS. August 04, 2010. Preliminary 7M10 operation results for the Russian oil and gas sector were posted Monday by CDU-TEK. According to their data, Russian oil output increased by 2.8% to 292.48 MMT (10.137 MMBOED) from January through July compared with the same period of 2009. In 7M10 Russian crude oil exports rose 3.7% YoY to 127.68 MMT, while gas production in Russia climbed 19.3% for the same period, reported the press-centre of OTKRITIE Financial Corporation.

For July, oil output increased by 2.3% YoY, and by 3.2% compared to June. Production growth for 7M10 was led by Rosneft (+8.1% YoY; 64.9 MMT), TNK-BP (+3.2% YoY; 41.7 MMT), Bashneft (+16% YoY; 8.1 MMT) and Gazprom neft (+0.5%; 17.3 MMT). The oil production increases posted by these companies was a function of the stabilization of oil output at brownfields and the expansion of production in greenfields. By contrast, the following companies saw decreased production: LUKOIL (-1.79%; 52.9 MMT), Surgutneftegaz (-1%; 34.3 MMT).

View: We believe this data will not significantly impact market prices for oil and gas companies as this production growth is largely found in the prices. Still, we believe this bodes well for both Rosneft and Bashneft, as such strong volume growth implies strong financials for FY10.