UPDATE: TNK-BP Second Quarter Net Profit Down 8%; Output Grows

(Adds comment, detail.) By Jacob Gronholt-Pedersen Of DOW JONES NEWSWIRES MOSCOW (Dow Jones)--Anglo-Russian oil producer TNK-BP International said Tuesday its second-quarter net profit fell 8%, but that the company remains on track to boost output as it posted production growth for the eleventh successive quarter. The company, part-owned by U.K. oil major BP PLC (BP), said its net profit under U.S. GAAP accounting standards for the April-June period was $1.16 billion, down from $1.26 billion a year earlier, as higher oil prices and output was partially offset by steep increases in export duties, taxes, energy tariffs and higher transportation costs. The company increased daily production--not including Slavneft, a joint venture with OAO Gazprom Neft (SIBN.RS)--to 1.75 million barrels of oil equivalent in the quarter, up from 1.74 million in the first three months of 2010. Growth is mainly driven by greenfield projects like Uvat and Verkhnechonskoye fields in Eastern Siberia, as well as the mature Orenburg fields, TNK-BP said. "This is the 11th successive quarter of production growth, supported by continued development of new projects in West and East Siberia, as well as sustained focus on optimizing our brownfield operations," Chief Executive Officer Mikhail Fridman said. The company spent $995 million on organic growth in the quarter, and added a total of 200 million barrels of new oil to its reserves in the first half of the year, mainly by drilling new wells in the Yamal and Orenburg regions. TNK-BP International's revenue jumped 29% to $10.51 billion in the second quarter. The company said net debt increased to $5.82 billion as of June 30, from $5.59 billion on March 31. The company said last month it would be interested in buying assets from its U.K. shareholder and plans to tap markets for up to $1 billion by the end of the year. Operating cash flow stood at $1.96 billion, while earnings before interest, taxes, depreciation and amortization, or Ebitda, was $2.39 billion. Refining margins in the first six months grew to $11.8 per barrel compared to $5.91 per barrel a year earlier. -By Jacob Gronholt-Pedersen, Dow Jones Newswires; +7 495 232 9197; jacob.pedersen@dowjones.com (END) Dow Jones Newswires July 27, 2010 03:42 ET (07:42 GMT)