MOSCOW, August 17. /TASS/. Rosneft looks forward to improvement of oil production dynamics, First Vice-President of the Russian oil major Pavel Fyodorov said on Wednesday.

"We believe production dynamics will improve further on account of these factors [new projects launch in the second half of the year - TASS]," Fyodorov said.

Company’s oil production rose 1% in July, he added.

It was reported earlier Rosneft lowered oil production by 0.1% year-on-year in the first half of 2016 to 100.7 mln tonnes. At the same time, oil and condensate production grew 0.5% quarterly to 4.11 mln barrels daily as of the end of the second quarter.

Rosneft might reduce capital expenditures

According to Fedorov, Rosneft might reduce capital expenditures by 5-10% in 2016 in comparison with the approved plan of 922 mln rubles ($14.4 bln).

"We are working on optimization, on executing plans within the scope of the budget that was approved by the Board of Directors. It is possible that at the end of the year we will see a 5-10% optimization," he said.

Earlier it was reported that Rosneft was going increase capital investments in 2016 by a third. Fedorov said that Rosneft will allocate 922 bln rubles ($14.4 bln) for investment this year.

Rosneft capital expenditures in the Q2 of this year totaled 154 bln rubles ($2.1 bln), which corresponds to the Q2 of this year. The company noted that in the second half of the year it was expected to increase the development of an investment program due to seasonal factors.

At the end of 2015, Rosnef increased capital expenditure by 23.8% compared to 2014 to 660 bln rubles ($10.29 bln). Rosneft said that the increase in capital expenditure in 2015 against 2014 is connected with an increase in volumes of production drilling for maintaining production in mature fields due to increased level of drilling services security, as well as escalating rates of settlement and development of new deposits.

In 2016-2018, the company plans to increase investment by 51% - to 1 trillion rubles ($15.59 bln) per year.

Plans to retain oil production volume

The company’s First Vice President Eric Liron said Rosneft plans to maintain oil production in the second half of 2016 at the level of the first half of the year, growth of hydrocarbon extraction is expected.

"As for our expectations for production, as was mentioned before, we are planning production of liquid hydrocarbons on the same level, and a slight increase in extraction of hydrocarbons," he said.