UPDATE 2-Rosneft helps Russian oil output to post-Soviet high

Tue Jul 2, 2013 4:45pm BST

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* Russian oil output reaches high of 10.53 mln bpd in June

* Gas output fell 12 percent in June, m/m (Recasts, adds analyst comments, links to tables)

MOSCOW, July 2 (Reuters) - State-owned Rosneft led the Russian oil industry to another post-Soviet output record in June as it continued ramping up production at eastern fields key to its China ambitions, Energy Ministry data showed on Tuesday.

The main field driving output growth, Vankor, is the single largest field supplying China and surrounding fields are due to be tapped in coming years to ensure the output gains necessary for Rosneft's promise to triple Chinese deliveries to nearly 1 million barrels per day in the future.

However, Rosneft's drive to boost the eastward route has been hampered by output decreases at TNK-BP, acquired in March for nearly $55 billion, which has been struggling to stem long-lasting production decline at old fields in West Siberia and other regions.

Rosneft, headed by Igor Sechin, an influential ally of President Vladimir Putin, acquired TNK-BP from BP and a consortium of Soviet-born tycoons earlier this year, while BP became a shareholder in Rosneft.

TNK-BP output's output declined 1.4 percent in the first half of this year compared to the first half of last year, thought it saw a small uptick month-on-month in June.

"We saw a decline in drilling activity by 8 percent in the first five months of the year at TNK-BP. Partially, this was due to the period of uncertainty following the Rosneft acquisition," Valery Nesterov, an analyst from Sberbank CIB, said.

In the first six months of 2013, Russia's total oil production, the world's largest, averaged 10.47 million bpd, up 1.4 percent from the same period a year earlier and above a target of 1 percent set by the ministry for this year.

According to Nesterov, consolidated oil output at Rosneft, excluding TNK-BP and subsidiaries, increased by 2.4 percent in January-June thanks to the new Vankor field.

Russia, where proceeds from oil and gas constitute around half of the federal budget revenues, aims to produce at least 10 million bpd of oil this decade.

INCREASE IN JUNE

In June, Russia's daily oil production rose by around 0.5 percent to 10.53 million barrels from May. The previous post-Soviet record monthly peak of 10.50 million bpd was reached in December.

Russian production in June was higher than 9.5 million bpd pumped by Saudi Arabia. In tonnes, Russia's total crude production was 43.083 million last month.

Last month's increase was mainly due to a production ramp up at TNK-BP Holding, now 95 percent owned by Rosneft and presented separately in the Energy Ministry data.

The company increased its oil production 1.4 percent in June, month-on-month, thanks to recovery of output at its Orenburg subsidiary in the Volga Urals region, where fields have been developed for over 75 years and are among Russia's oldest.

Production at Orenburg rose by 2 percent in June from May but six months output declined there by 1.8 percent, year-on-year.

Orenburg had been held up as a model of brownfield management, coming out of decline to reach peak production in recent years, but it went into decline again due to problems with water management, sources close to TNK-BP have said.

Lukoil, Russia's No.2 crude producer, increased output by 3.2 percent month on month buoyed by its acquisition of an upstream asset from Hess Corp for $2.05 billion.

The company plans to increase its oil output by around 1 percent this year after three consecutive years of decline caused by depletion of its West Siberia fields and poor geological data in Northern Russia.

The ministry said Russia's daily natural gas production fell almost 12 percent to 1.5 billion cubic metres (bcm) last month from 1.7 bcm in May.

Gas output at Gazprom, the world's top producer, fell by more than 14 percent in June from May to 1.01 bcm per day. Year-on-year production was down 8.6 percent.

The company has been squeezed out by rivals, such as Novatek, from the domestic market, where its share fell to 73 percent last year from 80 percent in 2008. ($1 = 32.9557 Russian roubles) (Reporting by Vladimir Soldatkin and Melissa Akin; editing by William Hardy)