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. Last Updated: 07/27/2016

First-Half Oil Output Rises 11%

Russia increased crude oil extraction 11 percent in the first half, as high oil prices spurred companies to boost investments so they could export more oil.

Oil output rose to 202 million metric tons, equivalent to 8.2 million barrels per day, in January through June, the State Statistics Committee said in a report faxed to news services. It did not provide year-ago figures, only the percentage change.

Crude oil prices rose to 12-year highs in February as the United States prepared to attack Iraq. Brent crude for one-month settlement averaged $28.30 per barrel in the first six months of the year, up from $23.43 in the year-earlier period.

Domestic producers like Yukos and LUKoil rely on exports for most of their profit because international crude prices are about four times as high as local rates. This month, both companies reported that first-quarter profits had more than doubled.

The Organization of the Petroleum Exporting Countries also boosted output, partly to ensure the Iraq war wouldn't hurt supplies to the United States and Europe. Saudi Arabia, the only country that produces more oil than Russia, boosted first-half oil output 17 percent to 8.3 million barrels per day, according to Bloomberg estimates.

Russia pumped 311 billion cubic meters of gas in the first half, up 2.8 percent from the year-earlier period, the statistics committee said. It refined 93.7 million tons of oil, a 4.1 percent increase from a year ago. The country mined 135 million tons of coal, a 13 percent increase.

In June, Russia pumped 11 percent more oil than in the same month of 2002, the committee said, confirming the Energy Ministry's estimate given two weeks ago. It cut crude refining 0.3 percent in June, gas production rose 5.2 percent and coal mining increased 1.4 percent, the committee said, without providing absolute numbers.

Exports of oil products from the former Soviet Union rose 3.2 percent in June versus May to 2.11 million bpd, a Geneva-based consultancy said Tuesday.

Petrologistics said the rise was in line with expectations given seasonal factors, though exports were also 16 percent higher than in June 2002 on higher crude throughput.

(Bloomberg, MT)