Russia's oil output hits post-Soviet high

Russian leaders hailed their powerful energy industry on Sunday as the country posted a post-Soviet record high rate of oil production that should boost coffers in uncertain global economic times. The energy ministry's data reporting unit said Russia produced 10.38 million barrels per day in August -- a fractional increase on July that put it above any mark seen in the past two decades. Nearly a quarter of that oil was produced by the state's massive Rosneft unit that recently struck historic new Arctic exploration alliances with the US super-major ExxonMobil as well as Italian and Norwegian firms. Analysts said production is rising as companies seek to take advantage of strong global oil prices before a potential hit from the impact of a mooted Greek withdrawal from the eurozone in the months to come. But the news is especially welcome for a budget that earned 49 percent of its revenues from oil and gas sales in 2011 and will now hope for output to meet President Vladimir Putin's big spending promises for his third term. Putin's prime minister and Kremlin predecessor Dmitry Medvedev hailed Russia assuming its "rightful place" as the world's largest combined exporter of oil and natural gas. Russia claimed the world's top oil production rate last year but now closely trails Saudi Arabia because it lacks the resources to quickly step up output at times of rising prices. It is still the globe's top natural gas exporter thanks to Gazprom -- a state behemoth that is now facing headwinds because of its initial failure to tap into the exploding liquefied natural and shale gas markets. Energy Minister Alexander Novak said energy as a whole accounted for 30 percent of the country's gross domestic product last year and was "developing successfully and at a stable rate in recent years". But he also pointed to necessary improvements to a tax policy that often fails to reward investment and appears to focus on revenues rather private firms' strategic growth. "The first thing we need to do is improve our tax regulation," the energy minister said in a statement.