Russian Prime Minister Mikhail Kasyanov has postponed indefinitely a meeting with oil magnates on third quarter exports, after the world's second largest oil exporter decided to abandon a deal with Opec to curb supplies.

A government source told Reuters that the meeting, initially set for June 20, might be cancelled altogether.

"Russia has said it would gradually abandon its deal with Opec by July. So, there is no need for such a high-level meeting in June. All questions can be solved by a lower government commission for access to oil pipelines," the source said.

He said the commission would meet to set third quarter export volumes on Monday, adding that preliminary details for the schedule were not yet available.

Traders and industry sources believe Russia will further boost its exports in July-September after reaching record export volumes in the first two quarters of 2002.

Russia, where oil output is booming for the fourth consecutive year, agreed to curb its January-June exports by around five per cent to help Opec to prop up world oil prices.

However, the country's statistics showed that Russia in fact abandoned the deal as early as March, when it exported a record 2.73 million barrels per day and kept its supplies high in April and May.

"I think Russia will further boost supplies in July-September, traditionally the best season for exports due to good weather. But the rise is unlikely to be dramatic as the export system is already pumping at capacity," a Western trader said.

Russia said yesterday it planned to raise its oil exports by six to eight per cent in 2002 on 2001 levels despite an earlier agreement with Opec to curb supplies in January-June this year.

The figure has been already made public last year before Russia and Opec clinched the supply curb agreement and its resurrection showed once again that the compliance of world's second largest oil exporter with the deal was weak.

"We are planning to increase oil exports this year by six to eight per cent and thus, the oil output rise will be at about the same level," Economic Development and Trade Minister German Gref told reporters.

Russia, where oil output is booming for the fourth consecutive year, agreed to curb its January-June exports by around five per cent to help Opec to prop up world oil prices.

However, the country's statistics showed that Russia in fact abandoned the deal as early as March, when it exported record volumes, that traders say were above the all-time high levels.

Last year Russia exported 2.75 million barrels per day of its own crude excluding transit volumes from neighbouring Kazakhstan and Azerbaijan to Western markets, according to customs data. It also exported 68 million tonnes of refined products.

Meanwhile, Lukoil is reshuffling its refining and trading operations as part of a new strategy to bring down costs and boost effectiveness, company sources and traders said.

The move will help Lukoil, long criticised for slow growth and archaic management, to catch its market peers in Russia and regain the confidence of investors by getting rid of a plethora of costly intermediaries, analysts said.

Traders said the plan could present a threat to trading houses, particularly the Geneva-based Taurus, which has for years enjoyed near exclusive access to seaborne barrels from one of the world's largest private oil firms.

"We are planning to merge our refining and sales operations in Russia and overseas...Much will change in our exports. We will have one export coordinator by the end of 2002," a high-level Lukoil source told Reuters.

"All I can say is that the restructuring announced in April is under way, including in our trading operations," Lukoil vice-president Leonid Fedun said.

Lukoil announced in April an ambitious restructuring plan with the aim of doubling oil and gas output, reducing production costs, boosting exports and improving management.

Although Russia's largest oil producer, with 1.6 million barrels per day (bpd), Lukoil output is growing at a mere 2-3 per cent compared with the double digit figures of its rivals.

The firm exports around 800,000 bpd of oil and refined products to lucrative Western markets, or around 20 per cent of the total exports from Russia, the world's No 2 oil exporter.

But unlike many Russian majors, which ship their barrels through one channel, Lukoil exports are split between a complex web of associated companies and intermediaries.

"Centralising operations under one roof clearly brings more transparency," said Steven Dashevsky from Aton brokerage. "It will help not only investors but Lukoil's managers as well to better understand how their barrels are sold."

The Lukoil source said the firm was gradually uniting its exports in its Geneva-based trading department, known as Lukoil S.A. Geneva for the crude oil side, under the name Litasco. Refined oil products are already traded under this entity.

By the end of 2002, Litasco is set to market all Lukoil barrels, the source said.

To date, Lukoil Geneva has mostly marketed only smaller Lukoil cargoes out of the Black Sea and about half of the firm's volumes out of the Baltic Sea.

Geneva-based Taurus, which does not belong to Lukoil, typically received the Russian producer's larger cargoes of one million barrel from the Black Sea, usually about five every month, plus one or two cargoes from the Baltic Sea.

Lukoil has always denied any special relationship with Taurus, but traders have questioned why Lukoil committed huge volumes to an independent firm instead of selling its crude directly to Western majors and refiners.

The source in Lukoil said Taurus was very useful in mid-1990s, when it offered credits along with French bank BNP Paribas using oil as collateral. But now the scheme had outlived its usefulness, he said.

"The scheme was first hurt by Russia's financial crisis, when Western banks did not want to lend at all, and second when oil prices skyrocketed in 2000 and Russian firms decided not to borrow money at all," the source said.

However, traders also linked changes to Lukoil's recent management reshuffle when one the firm's founders, Ralif Safin, who has long monitored exports, resigned to become a member of the Federation Council upper chamber of the parliament.

The source in Lukoil confirmed that Dmitry Tarasov, a Lukoil Geneva senior trader, would soon be appointed Lukoil's first vice president responsible for refining and trading operations.

Another trader said changes in exports could be linked to Lukoil's decision to list its shares in the United States. "It would not surprise me if U.S. officials started questioning why the independent Taurus was getting so much crude," the trader said.

The source in Lukoil said Tarasov's job would be not only to better run exports but to manage refining in Russia and abroad as well as domestic sales, now also run by separate units.

"This new coordination can be very fruitful because exports are not always necessary and sometimes it is more profitable to sell some products at