Russian oil output rose by 2.2 percent in 2010 to a record 10.1 million barrels per day (505.193 million tonnes) as higher prices prompted the world's top oil exporter to ramp up production at its greenfield sites.
The growth in crude production surprised many analysts, who had expected 1.1 percent on average, when polled just before the start of 2010.
Energy Ministry data on Sunday showed the country extracted 10.145 million barrels per day last year, a record since the collapse of the Soviet Union, up from 9.93 million bpd in 2009 and 9.78 million bpd in 2008.
The government said last month it expects oil output to edge down this year.
Non-OPEC member Russia was the only country to produce more than 10 million bpd of oil last year as oil prices, which reached a 26 month-high above $90 per barrel, stimulated higher output.
The output of Saudi Arabia, the second-biggest producer, has been 8.25 million bpd during recent months, reflecting production quotas introduced by the Organization of the Petroleum Exporting Countries in December 2008 to boost falling crude prices.
Russian pipeline oil exports stood at 4.37 million bpd in December, bringing the annual average exports in 2010 to 4.29 million bpd, up from 4.24 million bpd in 2009 and 4.19 million bpd.
Exports are set to increase substantially this year as Russia began scheduled oil shipments to China via an East Siberian link on Saturday, cementing ties with its energy-hungry neighbor.
An annual plan envisages the supply of 15 million tonnes (300,000 barrels per day). Many oil market participants expected it would effectively double Russian sales to China.
One of the main obstacles for Russian oil output growth are heavy taxes in the industry, the main contributor to the government which is trying to plug a budget deficit.
The Economy Ministry expects production to edge down to 504 million tonnes (10.122 million bpd) in 2011, while Rosneft, which produces over a fifth of Russia's oil, expects its crude output to grow by a modest 0.5 percent to 120.2 million tonnes.
Bashneft, owned by oil-to-telecom holding Sistema, which has been pumping oil at the highest rate among Russian firms, increased production by almost 18 percent to 14.15 million tonnes in 2010.
GAS OUTPUT LAGS THE U.S. PRODUCTION
Russia's 2010 natural gas production increased by 12 percent to 650.311 billion cubic meters (bcm), year-on-year, or 1.78 bcm a day, as the world economy picked up.
That's below gas production in the U.S., the world's top natgas producer, which pumps over 2 bcm a day (over 70 billion cubic feet), on the back of increased gas extraction from layers of shale, a modern technology employed several years ago.
The United States took the top spot from Russia in 2009 for the first time since 2001 thanks to shale gas production.
Gas output at Gazprom, the world's top natural gas producer, grew last year by 10 percent to 508.471 bcm, or 1.4 bcm a day, after it slumped to an all-time low of 461 bcm in 2009, off 16 percent from the 550 bcm in 2008.
The company sees its output reaching pre-crisis levels by 2015, two years later than it had planned. Gazprom supplies around a quarter of Europe's gas needs and is highly dependent on the European Unions's demand. It had planned to reach pre-crisis level with up to 570 bcm output by 2013 and started monitoring unconventional gas prospects.
(Reporting by Vladimir Soldatkin; Editing by Erica Billingham)