Russia must produce 505 million tonnes (3.7 billion barrels) of oil a year, Putin said after a meeting with oil and gas officials and corporate executives in Saint Petersburg.

It is an optimal volume of oil production to meet needs of the domestic and external market, he said, according to Russian news agencies.

Russia's oil production in 2010 exceeded forecasts and stood at 505.2 million tonnes, 2.2 percent higher than one year earlier, official Russian data released Wednesday showed.

Russia produced on average 10.1 million barrels of oil a day in 2010, the data said, a figure which may allow it to keep its lead as the world's top oil producer ahead of OPEC kingpin Saudi Arabia.

In 2009, post-Soviet Russia surpassed Saudi Arabia as the world's largest producer due to production from new oil fields in the Arctic and Siberia for the first time.

Russia relies on oil exports for about 40 percent of its federal budget.