Yukos beats LUKoil in production

by Alexander Tutushkin

Yukos has taken over as No. 1 oil producer for the first time, beating out LUKoil in monthly crude production for October, according to the Energy Ministry. LUKoil produced 6.412 mm tons in October, while Yukos pumped 6.429 mm tons, according to ministry data.
Yukos, furthermore, is predicting a growth rate of 18 % next year, which analysts said would keep the company at No. 1.

LUKoil, however, said the Energy Ministry figures are incorrect. The ministry did not factor in production at partially owned subsidiaries or foreign projects, said a LUKoil official. When this production is factored in, LUKoil produced 6.8 mm tons in October, the official said.
An Energy Ministry official, however, said partially owned subsidiaries had been included. LUKoil expects to extract 73.6 mm tons this year and boost production to 75 mm tons in 2003.

Yukos has not given a forecast for 2003, but company spokesman Alexander Shadrin said production would grow by 18 %. That would bring output to 82.6 mm tons. Yukos plans to produce 130 mm tpy of crude by 2010.
LUKoil, meanwhile, is forecasting output of 140 mm to 160 mm tons in oil equivalent per year by 2010. That includes 50 bn to 60 bn cm of natural gas and 100 mm tons of oil. Valery Nesterov, an analyst at Troika Dialog, said Yukos' step into the leading position was due to LUKoil's changing strategy.

LUKoil has begun concentrating on high-output upstream projects, Nesterov said, and so it is too early to say whether the company has lost the leadership for long.
"This fact has a negative effect on the company's image and on its investment attractiveness, so LUKoil won't give in without a fight," he said. This kind of competition is good for the oil sector as a whole, he added.