Rosneft has a 60% stake in the Kamchatka project, and was exploring the shelf with partner Korean National Oil Corp (KNOC). It is not clear whether the shelf has oil and gas reserves.

“Yes, we know of their decision,” Rosneft spokesman Nikolai Manvelov told Reuters, confirming media reports that Rosnedra, the federal subsoil agency within the Natural Resources Ministry, had not extended the license.

He declined to give a reason for the loss of the exploration license, which Rosneft received in 2003 for a five-year period.

“The most likely reason for the failure was the delay in the exploration schedule,” analysts at Renaissance Capital said on Monday.

Rosneft has said developing the shelf would cost around $24 billion, and planned to inject around $300 million this year.

“We believe that Rosneft will try to win the license back or will receive some form of compensation from the government if it loses the license,” RenCap said.

KNOC has said there could be up to 10.3 billion barrels of oil in Kamchatka, meaning its reserves could rival the Sakhalin project on the oil and gas-rich Russian Pacific island by the same name. (Reuters)