Rosneft Sees 2010 Output Growth Rate Higher Than 2009

MOSCOW (Dow Jones), Nov. 30, 2009

Russia's biggest oil producer OAO Rosneft says production growth will be "materially" higher in 2010 than this year, due to new volumes from its Vankor field, the company's Chief Financial Officer Peter O'Brien said Monday.

"We expect our production growth rate next year to be materially higher than this year," O'Brien said on a conference call.

State-controlled Rosneft has increased output this year to over 2.2 million barrels a day, up 2% from 2008. The increase came on the back of start-up of commercial production at its giant Vankor field in East Siberia in August.

East Siberia holds vast untapped oil reserves and is considered Russia's new oil frontier, as production falls from many fields in West Siberia--the country's traditional main production area.

Output at Vankor will total 3.5 million tons this year and between 11.5 million and 13.5 million tons next year, O'Brien said. Production is expected to reach plateau of around 500,000 barrels a day in 2014.

In an attempt to stimulate investments in East Siberia, Russia's government last week approved zero export duty for oil produced at 13 fields in the region, including Vankor, but gave no indication of how long the measure will last.

Oil producers are currently discussing the issue with the government.

Rosneft expects zero export duty for East Siberian oil to last between three and five years, O'Brien said.

Producers have complained it is difficult to plan long-term investments in the region without clarification about how long the zero export duty will last.

Rosneft plans to drill more than 50 wells at the field next year, which requires capital spending at least at this year's level, O'Brien said. He declined to give an exact figure, as next year's budget still has to be approved by the company's board.

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