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Russia credits more drilling for production increase

Rosneft said its crude oil production increased by about 0.5 percent from the first quarter.

By Daniel J. Graeber
Russian oil company Rosneft said it's drilling more and total production has increased as a result. Photo by Calin Tatu/Shutterstock
Russian oil company Rosneft said it's drilling more and total production has increased as a result. Photo by Calin Tatu/Shutterstock

MOSCOW, Aug. 11 (UPI) -- Russian oil company Rosneft said its overall hydrocarbon production for the second quarter of the year was on the rise thanks in part to a drilling boom.

Production for the second quarter was 4.1 million barrels of oil per day, an increase of 0.5 percent from the previous period. Total hydrocarbon production was up 0.2 percent from the first quarter and 0.7 percent year-on-year.

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The company credited the increase in production to an intensified drilling program, which was up 16 percent from the first quarter. The total footage of development drilling increased 48 percent from last year during the first half of 2016.

"In June 2016, a new record in daily drilling footage was set at all producing assets of the company," Rosneft said in a statement.

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Last week, oilfield services company Baker Hughes reported the international rig count, a metric that loosely measures exploration and production activity, was up marginally from June, but still down from last year. Some energy companies are increasing their activity as crude oil prices recover from below $30 per barrel, though prices are still far below the $100 per barrel level common two years ago.

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One of the top producers of crude oil in the world, the Russian company in June reported its net profit of about $224 million was off 75 percent from last year. The company attributed lingering weakness in crude oil prices, tax pressures and an increase in overall investments for triggering the decline.

Free cash flow of $1.5 billion was about 40 percent lower than first quarter 2015 and the company's net debt increased by 4 percent. A profile from the Organization of Petroleum Exporting Countries show total crude oil production from Russia should be up about 1.2 percent year-on-year, but lower than the first quarter of 2016.

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