* Russia's October oil output up 0.5 pct to 10.46 mln bpd
* Rosneft the main driver behind the rise
* Russian October gas production up 4.8 pct to 1.75 bcm
By Vladimir Soldatkin
MOSCOW, Nov 2 Russia's oil output hit a
post-Soviet high in October as a beefed-up Rosneft,
soon to be the world's biggest crude supplier, dug deeper into
The increased drilling helped lift Russia's oil output by
0.5 percent in October to 10.46 million barrels per day (bpd),
data from Russia's Energy Ministry showed, keeping the country
safely in the position of world's largest crude producer ahead
of Saudi Arabia.
The Kremlin is keen to maintain production of oil, a key
source of revenue for the state coffers, at no less than 10
million bpd over the next decade.
Oil and gas account for about 20 percent of Russian gross
domestic product and provide about half the government's revenue
after a decade-long boom in which production rose to more than
10 million bpd in 2011 from less than 7 million bpd in 2001.
Last month's increase was driven by top producer Rosneft -
set to acquire Anglo-Russian TNK-BP for $55 billion -
which increased output by 0.9 percent thanks to a 4.5 percent
increase at its prized Vankor development in East Siberia.
However Russian production is still short of the peak of
11.41 million bpd set in 1988, when it was part of the Soviet
Union, according to energy watchdog the International Energy
Russia's Energy Ministry said Russia's crude oil production
in tonnes reached 44.23 million last month. For the first 10
months of the year, output averaged at 10.35 million bpd.
Russia's crude production stayed above the 9.95 million bpd
pumped last month by Saudi Arabia, which, unlike Russia, has
spare capacity to produce more oil.
As the Russian domestic oil market is already fully
supplied, any increase in oil production will necessarily mean
an increase in exports.
BUCKING THE TREND
Rosneft, under the leadership since May of Chief Executive
Igor Sechin, bucked the worldwide trend of falling production at
the world's other top oil and gas companies, which are
struggling to deliver the output growth they need to outpace the
burgeoning cost of exploration and development.
For example, world No. 1 Exxon Mobil Corp's oil and
gas output fell by 7.5 percent in the third quarter, even as the
company raised its capital and exploration expenditures 7
percent to $9.2 billion.
The Russian group on Thursday beat forecasts with quarterly
net income of 181 billion roubles ($5.8 billion).
"The flagship (Rosneft) is feeling great. There were some
apprehensions that the company would be much politicised when
the new management arrived and would overlook operational
results. But yesterday's financial results are also saying that
everything is OK with Rosneft," Ildar Davletshin from
Renaissance Capital said.
With oil and gas assets tightly controlled by well-endowed
countries in the Middle East and elsewhere, the private sector
is spending more and more in deeper water and harsher
environments such as the Arctic.
Oil production at TNK-BP stayed flat as falling output at
its depleted West Siberian oil fields was offset by increasing
production from newly developed deposits.
After the merger, Rosneft's oil production will climb to 4.6
million bpd, the largest among the world's listed crude
Russia's daily natural gas production rose 4.8 percent month
on month to 1.75 billion cubic metres (bcm), thanks to seasonal
demand for the fuel.
Gas output at Gazprom, the world's largest natural
gas producer, rose 5.2 percent month-on-month to 1.27 bcm per