OREANDA-NEWS. September 18, 2007. Rosneft [RTS: ROSN] is expected to refine 38-39 million tons of oil in 2007 and upgrade former Yukos assets, acquired at recent auctions, the state-controlled oil company's vice president said.

Dmitry Bogdanov said the company refined 15 million tons of oil at its own facilities in the first half of 2007, and is planning to refine up to 25 million tons in the second half, including recently acquired assets.

"Consequently, our company could process 38-39 million tons by the end of 2007, and given the new facilities we have acquired, the figure could be higher at 48-50 million tons in 2008," Bogdanov said.

Rosneft became Russia's largest oil company after buying up the bulk of bankrupt company Yukos oil assets, auctioned off this year to pay tax arrears, which included five refineries.

Bogdonov told a press conference that the company would focus on modernizing its new facilities. "We have acquired rather outdated assets, which need an overhaul. We must become more competitive compared to those plants that have already switched to European standards," the official added.

However, he declined to specify the investment required for the upgrade, saying a detailed program would be approved at Rosneft's board meeting by November.

Bogdanov said the company is implementing a program seeking to modernize its refining infrastructure on the Black Sea by 2012.

President Vladimir Putin urged Russian companies last month to make swifter progress in developing their refining capacities. "After exporting crude, Russia then has to purchase much of its oil and gas products, from plastics to chemical fibers. The underdevelopment of our own refining industry is causing substantial economic losses," he said.