OREANDA-NEWS. January 22, 2010. Alliance Oil released 4Q09 and FY09 operating results. The company’s Q4 oil production remained unchanged QoQ at 3.9m barrels (42,500 bpd). Meanwhile, the company’s oil refining volumes at the Khabarovsk Refinery slid 5% QoQ to 5.6m barrels (60,870 bpd), reported the press-centre of OTKRITIE Financial Corporation.

In 2009, Alliance Oil’s crude oil output was 16m barrels and refining volumes amounted to 21.5m barrels (3m tons). The company also confirmed its 2010 upstream target for crude oil production of 17m bbl (+6% YoY) and a refining volume target of 21m bbl (-2% YoY).

View: Alliance Oil’s 2009 crude output results are squarely in line with our expectations, while its FY09 refining volumes surpassed our forecast of 21m barrels. The company’s 2010 crude production and refining volumes targets are in line with our forecasts. The marginal 2010 YoY decrease in refining volumes can be explained by the upgrade of the Khabarovsk Refinery’s capacities. Also worth noting is that in 4Q09 the company’s throughput fell 5% QoQ. We view this drop as temporary in light of the strong jump in output posted in 3Q09, when fuel oil and motor gasoline prices surged 35-40% QoQ. From our standpoint, a crucial trigger for a 6% incremental oil production in 2010 will be production growth in the Volga-Urals oil basin and in Kazakhstan.

Valuation: Alliance Oil trades at a 1% discount on P/E to Russian oil majors.

Action: We read this news as a short-term positive for Alliance Oil’s stock.