Khodorkovsky signals Putin rift with Russian oil czar over pardon

Khodorkovsky was arrested in 2003 for tax evasion and fraud and his company Yukos Oil was subsequently dismantled and auctioned off to pay for billions of dollars in back taxes. Most of its assets were eventually transferred to Rosneft, which produce

Mikhail Khodorkovsky, newly ex- inmate of various Russian prisons, is casually dressed and looking relaxed as he fields questions in his $1,400 a night Berlin hotel suite. He has some startling things to say.

One: for a man once considered to be worth $15 billion, he is now relying upon his lawyer to pay his immediate bills. Two: he's not going into exile (probably in Switzerland) quietly. He says Vladimir Putin pardoned him over the objections of Igor Sechin the man Putin entrusted with constructing the dominant state oil company.

The assertion, if it bears out, signals a rift within the nation's elite since Sechin, CEO of OAO Rosneft, the Russian state oil giant, and Putin go way back to when the two worked in the St. Petersburg mayor's office in the 1990s. Khodorkovsky has long contended that Sechin helped to plot the demise of his company, Yukos Oil Co.

Khodorkovsky was arrested in 2003 for tax evasion and fraud and Yukos was subsequently dismantled and auctioned off to pay for billions of dollars in back taxes. Most of its assets eventually transferred to Rosneft, which produces about 40 per cent of Russian oil.

Khodorkovsky and his supporters have long vowed his innocence and his imprisonment was seen as milestone in the Russian state wrestling back control of the oil industry, which underpins Putin's power.

'Central Role'
Now, if Putin has resisted Sechin's efforts to keep Khodorkovsky in prison, he "is showing how he is distancing himself from his entourage as he once did with the oligarchs," Gleb Pavlovsky, a former Kremlin adviser, said by phone from Moscow. "He wants to guarantee his central role and not allow any groups to become a threat to him."

Rosneft spokeswoman Darya Ermolina didn't respond immediately to a request for comment and Putin's spokesman, Dmitry Peskov, declined to comment. Sechin said after Khodorkovsky's release that he wasn't concerned that the former Yukos owner will seek to regain former assets and would even consider a job application from him, adding that all top management slots at Rosneft are filled.

Khodorkovsky, during the wide-ranging interview, painted Sechin as the mastermind behind Russia's turn toward a growing role of state ownership. Sechin also bred inefficiency at the company he built on the ruins of Yukos.

Sechin "is a real oligarch," said Khodorkovsky, 50, wearing jeans and a jumper on his fourth day of freedom from a decade in Russian prison camps. "He convinced Putin that state capitalism is right. I know that right up to the very end he was trying to convince the country's leadership not to free me only because he's personally afraid of something."

Russia's Oil
While Khodorkovsky spent what he says were "4,000 difficult days" in prison, first near the Chinese border and later close to the Arctic circle, the surging price of oil helped Putin consolidate his power. As the struggling global economy curbs demand for the fuel, Russia is now battling its slowest economic growth since a 2009 recession.

Along with the growth of Rosneft, the government expanded its role in the economy. State-owned companies now account for more than half of Russia's economic output, compared with 42 per cent in 2008, according to BNP Paribas SA's Moscow unit.

That increase is largely the work of Sechin. The Rosneft chief completed his conquest of the oil industry this year with the $55 billion takeover of BP Plc's Russian joint venture, TNK- BP.

BP, which now owns a 20 percent of Rosneft, acted within the boundaries of the law in taking some ownership in a company built on Yukos's expropriated assets, said Khodorkovsky.

BP, Abramovich
"It's another matter whether it was ethical," he said. Khodorkovsky ruled out any lawsuit to recover more than $3 billion that billionaire Chelsea FC owner Roman Abramovich received for the aborted merger of his Sibneft oil company with Yukos.

Still, Sechin's access to Putin and Rosneft being embedded in the Russian power structure failed to benefit the country's oil industry, according to Khodorkovsky.

Yukos in 1998 viewed the then $14 a barrel cost of crude as a "great price" that allowed it to finance investments, Khodorkovsky said. Now, with Brent at about $110, Sechin is asking for tax breaks to develop reserves in eastern Siberia, he said.

'Only Money'
"Rosneft's performance isn't something to be proud of," said Khodorkovsky, who's been living in a five-star hotel in Berlin with his eldest son and parents since his release. He said he doesn't have any desire to seek revenge against Sechin.

"Sechin was really only interested in money, which for me isn't something that gets under my skin," Khodorkovsky said. The former tycoon said he doesn't have any money available and is relying on his lawyer's personal credit card to pay for bills.

"I don't have any access to my funds right now and I don't have any precise idea where they are and how much I have," he said, adding that he doesn't plan at the moment to ask business partner Leonid Nevzlin to return his majority stake in Group Menatep Ltd., which holds more than $2 billion mostly from proceeds from the sale of Yukos's non-Russian assets.

Khodorkovsky, due to be joined in Berlin by his wife, Inna, and their three children flying in from Moscow, said he'd "most likely" settle in Switzerland. He ruled out a return to Russia for fear of not being allowed to leave again.