OREANDA-NEWS. August 04, 2010. Rosneft hosted a conference call with investors and analysts to comment on 2Q10 and 1H10 US GAAP results and provide an updated outlook on the company’s operating performance, reported the press-centre of OTKRITIE Financial Corporation.

Among other things, management provided more optimistic production volume guidance for Yuganskneftegaz, which develops the large Priobskoye field. Commenting on its better-than-expected performance YTD, Rosneft management effectively upgraded its 2010 production volume guidance for Yugansk from a 2-3% decline to a 1.5-2.0% decline.

Speaking on the future tax rates, in particular about the mineral extraction tax (MET) on crude oil, Rosneft management said the Finance Ministry’s proposal to index the oil MET rate by 6.5% in 2012 and 5.4% in 2013 were not final. Essentially, management implied that the tax environment in the Russian oil sector may appear to be more benevolent (especially with respect to greenfield projects) than recent statements of various government officials would suggest.

View: In our view, the conference call produced a positive overall impression on the participants. The more optimistic guidance for Yugansk in combination with the slender ray of hope that Rosneft can retain preferential tax treatment for the Vankor field for a slightly longer period, would seem to bode well for the stock.

Rating and Action: In light of impressive 2Q10 results and the positive near-term outlook, we maintain our positive view and our BUY rating on Rosneft.