CORRECTED-UPDATE 1-Russia's oil output stays ahead of Saudi in July

(Corrects to show October 2010 in bullet point, paragraph 2)

* Daily output of 10.26 mln bpd seen in May 2011, Oct 2010

* Saudis catching up as spare capacity comes online

* Top oil producer announced record 2.4 mln bpd in July

* Gas output falls 7.6 pct on daily basis month/month

(Adds Saudi production, Russian field declines and efforts to
revive production growth)

MOSCOW, Aug 2 (Reuters) - Russia pumped 10.26 million
barrels per day of crude oil in July, matching a post-Soviet
high recorded in May and retaining the title of top producer as
its closest rival, Saudi Arabia, rapidly closes the gap.

Russia also pumped 10.26 million barrels per day (bpd) in
October 2010. The June rate was 10.2 million bpd.

By comparison, Saudi Arabia pumped as much as 9.8 million
bpd in June, an increase of as much as 900,000 bpd in response
to the loss of Libyan supply after it failed to persuade OPEC of
the need for a coordinated increase.

But while the kingdom had the spare capacity to ramp up
production by nearly 10 percent in a month, Russia's top oil
companies are struggling to grow by just a few percent a year.

Top Russian producer Rosneft said it hit a record
2.4 million barrels per day in July, with an increase in output
at its new Vankor field and extra drilling at its biggest unit,
Yugansk, accelerating its current growth rate to 1.5-2 percent.

Russia's Soviet-era oil heartland is on the decline, and the
government is working to provide incentives to coax
capital-intensive new fields on line and staunch the declines.

Deputy Prime Minister Igor Sechin, Russia's oil tsar, has
pitched the case for multi-billion dollar foreign investment in
harsh, remote new oil provinces as a means to guarantee supply
during times of shock.

Natural gas output stood at 48.40 billion cubic metres, down
from 50.67 bcm in June, a fall of 7.6 percent on a daily basis.

The decline is probably seasonal, but analysts are watching
to see whether export customers who buy from Gazprom
will reduce offtake in the second half, when the price they pay
under Gazprom's oil-linked long term contracts is set to rise
sharply.

(Reporting by Olesya Astakhova; writing by Melissa Akin;
editing by Jane Baird)

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