UPDATE 1-Russia oil output seen up at 10.3 mbpd in 2010

(Adds more figures, background)

MOSCOW, July 23 (Reuters) - Russia expects its oil output will rise by 4.6 percent in 2010 compared to 2007, an energy ministry document showed on Wednesday, stopping short of making predictions for 2008-09.

A government source quoted the report, issued by Energy Minister Sergei Shmatko to Prime Minister Vladimir Putin, as saying that oil output in Russia will reach 514 million tonnes (10.3 million barrels per day) in 2010, up from 491.5 million tonnes last year.

The report did not include the ministry's forecasts of oil production for this year and 2009.

Oil production in Russia, the world's second largest oil exporter after Saudi Arabia, fell by 0.3 percent in the first half of this year, prompting some analysts to say the fall might become a trend until the country launches production at new deposits in East Siberia and the Far East.

Shmatko said earlier this month that Russian oil output will be at least flat this year despite a drop in the first half and will certainly rise next year.

Last year, Russian production rose by 2.3 percent, a notch up from 2.2 percent in 2006, but much lower than huge spikes in previous years -- including a record 11 percent in 2003.

The government made maintaining output and exploring for more oil top priorities for the strategic oil sector and approved a number of tax breaks for the oil industry from 2009 to allow firms to fund new projects.

The report said the main reasons behind lower output were insufficient investment and high depletion of deposits in traditional oil producing regions like West Siberia and Urals, where fields are depleted over an average of 30 percent and the share of hard-to-extract resources reached 30 percent.