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Jailed Russian billionaire pioneered oil deals with China

Jailed Russian former oil tycoon Mikhail Khodorkovsky spotted lucrative business prospects in China long before fellow Russian billionaires. (Denis Sinyakov/Reuters)

As the head of Russia’s biggest oil company in the 1990s, Mikhail Khodorkovsky spotted lucrative business prospects in China long before fellow Russian billionaires.

But it was only after Vladimir Putin moved into the Kremlin in 2000 that Khodorkovsky started spending all his time near the frontier: He got thrown in a remote Siberian jail more than 3,000 miles from Moscow — and “closer to the Chinese border than I had ever been in my life,” Khodorkovsky said.

Russian authorities arrested Khodorkovsky in 2003 just as his private oil company, Yukos, was completing plans for an oil pipeline across the frontier. He said the project had been endorsed by the Kremlin but may have contributed to his arrest.

The former tycoon sent a written reply to questions from his current place of detention, in northern Russia. He had previously been held in the Siberian region of Chita, spending time in a labor camp just 25 miles from China.

Yukos’s proposed pipeline to China faced strong opposition from some officials, who wanted the state to take the lead and favored building a much longer pipeline, all the way to Russia’s Pacific coast.

“Certain state functionaries,” said Khodorkovsky, wanted to “make a lot of money from a big state contract.” He said they had “managed to do this after the destruction and plundering of Yukos.”

Nikolai Tokarev, the head of state-owned pipeline monopoly Transneft — which eventually built both the Pacific pipeline and a branch line to China — denied that pipelines played any role in Khodorkovsky’s woes. Transneft, he said, “has no connection whatsoever with his problems.”

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