The comment came after the North Caucasus republic's energy minister accused Rosneft earlier
Wednesday of serious violation 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 serious breach of the agreement.
Amadi Temishev said Rosneft receives about 25 billion rubles [$930 million] from sales of oil extracted in Chechnya annually, whereas the Chechen budget, which totals 19 billion rubles ($706.5 million), does not get even a tenth of the sales.
Rosneft said 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.
But Temishev said that crude production in the republic is plummeting, and in two-three years Chechnya will be able to produce only 600 tons (4,410 bbl) of oil instead of the current 2 million tons (14.7 million bbl), adding there are more than a thousand abandoned oil wells in the republic.
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. Rosneft said its operations in Chechnya strictly adhere to the regulation.
However, Amadi Temishev said Rosneft is acting as an oil production operator under a separate agreement with the Chechen government.
"In 2002, Rosneft signed a licensing agreement with the Chechen republic to act as an oil production operator, but it has been openly violating the conditions it agreed to ever since," he said.
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 shattered republic
Rosneft said Wednesday it has 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).
The oil company held an initial public offering this summer in Moscow and London, the biggest in Russia's corporate history and the world's fifth largest, raising $10.4 billion, and announced it will float futures on the RTS in mid-October.
