Ukrnafta slows pace of oil output decline in 7M12

Leading Ukrainian oil producer Ukrnafta (UNAF UK) posted a 5.7% yoy decrease in oil output to 1,166 kt, a 7.3% yoy drop in gas production to 1.17 bcm, and a 14.0% yoy growth in gas condensate output to 166 kt in 7M12, Interfax reported, citing a source in Ukraine’s Energy Ministry.

Alexander Paraschiy: Assuming the ministry’s data is reliable, it suggests the rate of Ukrnafta’s oil output decline slowed over the period (vs. -6.6% yoy in 1H12) after a flat month of production yoy in July. We estimate Ukrnafta’s July oil production at 176 kt, or mom growth of 3.4%. The development looks somewhat positive for the company as it could signal an increase in 2H oil production for the first time in over 4 years.