Russian regional oil producer Tatneft has begun to match the improving operational and financial performance of its domestic peers after struggling to shake off the impacts of the Covid-19 pandemic.

According to Tatneft, its oil and condensate production rose by over 24,000 barrels per day to 542,000 bpd in the period between January and August this year, taken against the average for the same period of 2020.

But the company was still lagging behind its performance in the pre-Covid year of 2019 when its output was running at the average of about 592,000 bpd.

By August, Tatneft was actually outperforming peers in the Russian industry, reporting a 12% jump in output on the month, to 575,000 bpd.

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The oil producer was followed by Lukoil, which reported a 9% increase in production last month, then Surgutneftegaz with 7%, Rosneft with 6% and Gazprom Neft with a 2% rise, according to preliminary data from the country’s energy ministry.

Tatneft’s consolidated financial results for the first half of this year have also underlined improving fundamentals for a producer that operates mostly depleted legacy fields.

Some of these have been in production since 1930s and are in the tertiary development phase.

The company's revenues reached 585 billion rubles ($7.8 billion) between January and June, up 56% compared with the same period of 2020.

Net income more than doubled to over 92 billion rubles on a yearly comparison, Tatneft said in its report.

A higher direct tax take by the Russian government weighed on in the company’s expenses in the first half of this year.

Tatneft paid 229 billion rubles in production, export and other taxes to authorities, against 94 billion rubles in the same period of 2020.

Last year, authorities suddenly removed tax privileges previously allowed for Tatneft’s high viscosity oil barrels. These barrels are are more expensive to produce because the company has to pump pressurised vapour to heat crude in shallow formations before it can be pumped to the surface.

However, higher revenues this year have generally improved the finances of the oil producer, with gross debt retreated 3% to below 23 billion rubles, with free cash flow and short term financial assets rising by 77% to 149 billion rubles.

Despite the improving production trend reported by major producers, Russia's energy ministry still expects domestic oil and condensate output to decline by 1% to 10.2 million bpd this year.