Russian capitalism at a glance

What does a West London football club have to do with a 13,1 billion $ sale of a Russian oil stake ? Essentially not much but the two still share a common denominator; Mr. Roman Abramovich. Although he has spent the last 2 years in London nurturing his pet investment Chelsea Football Club (CFC) buying the club to glory he has kept his Russian ties strong through a 72.7% stake in the Russian oil company Sibneft and a governor post in the desolate but oil/gas abundant Siberian region Chukotka (geographical link). Now it seems that Ambramovich's capitalistic endeavors in Russian business is drwaing to a close as he offloads his Sibneft stake to the gas-giant Gazprom essentially making it a stateowned behemoth - see article from the Economist here (walled for nonsubscribers) and article from Herald Tribune here. This deal shows two things in my opinion ...

1. After the ex-boss of Yukos Mikhail Khodorkovsky's imprisonment and the subsequent state freeze of all his assets the remaining oligarchs are beginning to worry about the powers wielded by Kremlin. Khodorkovsky's fall from grace is taken in as a lesson to remember and Abramovich's sale of Sibneft to a statecontrolled enterprise is mirrored in this; better leave sooner than later and keeping Putin happy in the process. The Economist article implicitly suggests that Abramovich is colluding with Putin but no evidence for this is clear.

2. The second thing which is far more important than the manoeverings of a football club owning oligarch is the Sibneft deal's remifications on the openess and reputation of the Russian economy. After the deal the Kremlin can add the ownership of one third of the oil industry to its portfolio alongside its monopoly on most pipelines. This is moving in the wrong direction in my opinion and a fortified state grip of the energy sector will not do the Russian economy any good.

As always comments are welcome ...