Chechnya's oil production and sales are run by Grozneftegas, in which Rosneft owns a 51% stake, with the Chechen administration controlling the remaining 49%, under a government regulation passed in 2000.
"We raised the issue of revoking the license because the operator is flagrantly violating commitments on the use of oil wells in the Chechen republic without prospecting or developing new sites," Amadi Temishev said.
He said Rosneft and its subsidiary were holding the license on a temporary basis, and that the license period would soon end.
A Chechen delegation has been on a visit to the city of Hangzhou in eastern China since Sunday, where delegates presented the republic's investment opportunities and signed a partnership agreement between the regions.
Temishev also said the reserves of existing wells were depleting fast in the republic, while he said there were huge unexplored oil reserves 7,000 meters deep.
Rosneft became embroiled in a dispute with Chechen authorities last week after Temishev accused the company of serious violations of an oil production agreement with Chechnya signed in 2002. He said the Chechen oil industry is being wantonly plundered, and that oil extraction is being conducted in breach of the agreement.
Temishev said Rosneft receives about 25 billion rubles [$930 million] from sales of oil produced in Chechnya each year, while the Chechen budget, which totals 19 billion rubles ($706.5 million), does not get even a tenth of the sales.
But Rosneft said its operations in Chechnya strictly adhere to the 2000 regulation, and that its entire crude output from Chechnya is exported, with revenue accumulated at a Russian Industry and Energy Ministry's special account to finance a federal program on the development of the republic's economy and infrastructure, along with its oil and gas sector.
Chechen President Alu Alkhanov said last week that Rosneft should hand over its license for oil extraction in Chechnya to Grozneftegaz, in a bid to add more than two billion rubles ($70 million) to the republic's budget and accelerate the revitalization of the war-torn region.
Grozneftegaz produced some 2.2 million metric tons of oil (44,000 bbl/d) and over 530 million cubic meters of natural gas in 2005 and plans to invest 640 million rubles ($24 million) in the republic's oil production in 2006.
Rosneft said last Wednesday it increased total crude production by 8.4% year-on-year in the first nine months of 2006, to 59.4 million tons (1.59 million bbl/d).
