Abramovich quits job in Siberia to spend more time on Western front

Shaun Walker
Friday 04 July 2008 00:00

The Chelsea FC owner Roman Abramovich has resigned from his post as governor of the north-eastern Russian region of Chukotka after eight years in charge.

The new Russian president Dmitry Medvedev accepted the resignation, the second time that Mr Abramovich has attempted to leave the governor's job. Mr Medvedev's predecessor, the current prime minister Vladimir Putin, had previously persuaded him to stay on.

Many will see the move as part of a strategy by Mr Abramovich to reorient himself away from Russia and towards the West, following the sale of his Sibneft oil empire to Gazprom in 2005. However, his Moscow-based spokesman denied this. "This is categorically not a withdrawal from Russia," said John Mann. "Russia is still his primary home."

Mr Mann said it was a case of "mission accomplished" for Mr Abramovich in Chukotka. The region was in crisis when he took over and analysts based in Russia's far east say that quality of life for the region's 50,000 residents has skyrocketed under his tenure. Mr Abramovich is estimated to have invested about £1bn in the region, and average salaries went up from about £100 per month in 2000 to £500 per month in 2006.

"He created a great team, and many problems of the native peoples and others in Chukotka were solved by him," Tatyana Zakharova, an analyst based in the far-eastern city of Khabarovsk, told a Russian news agency.

Chukotka acted as a convenient tax haven for the oligarch, said the political analyst Stanislav Belkovsky, and it also gave him a formal position that meant he had an official reason to meet Mr Putin in the Kremlin.

But for some time, Mr Abramovich, whose second term as governor of Chukotka did not expire until late 2010, has wanted to leave the region. In late 2006, Mr Abramovich told Mr Putin he was resigning from the post, but Mr Putin insisted he stay. "They initially agreed that Abramovich would leave in early 2007," said Mr Belkovsky. "But at the last minute Putin changed his mind and persuaded Abramovich to stay on."

It is thought Mr Abramovich agreed to stay on until the transfer of power in the Kremlin was completed in May this year. Mr Mann said he did not know if he had met with Mr Medvedev to discuss the resignation.

Chukotka is a long way from Chelsea, and many have noted that Mr Abramovich has devoted much more attention to his west London football team than his far-eastern region. He is reported to have visited Chukotka only once in 2008, running the region through a team of associates. However, his spokesman said there would not be a complete disengagement from the region. Mr Mann said it was more a case of a "change of role", as charitable foundations and business interests linked to Mr Abramovich would continue to work in Chukotka.

After an expensive divorce settlement with his ex-wife Irina last year, Mr Abramovich slipped from first to third place in the Forbes Russia rich list, but is still estimated to be worth about £12bn. Mr Abramovich is the most successful survivor from the first wave of Russian oligarchs, who amassed vast wealth during the 1990s as Russia's assets were sold off cheaply.

But while many Russians resent the way Mr Abramovich has used the wealth he accumulated in Russia to buy Chelsea, he has always kept the Kremlin on side. "I would put him in the top five most important people in the country," said Mr Belkovsky. "He played a hand in the promotion of Putin and then last year also recommended Medvedev to Putin. You can't get much more influential than that."

The making of a billionaire

* Like most of today's Russian super-rich, Roman Abramovich began life in surroundings a far cry from the luxury he has now. Born in the city of Saratov in 1966 and orphaned aged three, Abramovich was raised by his uncle and his wife and ended up dropping out of college in Moscow. His first business venture was selling plastic ducks, but controversial oil deals in the 1990s made him his fortune.

* In 1995 Abramovich, with Boris Berezovsky, paid £50m for the controlling interest in the oil company Sibneft. It would go on to be worth billions. Berezovsky was one of Russia's most powerful men in the 1990s. but the former partners fell out after then President Vladimir Putin turned on Berezovsky.

* As the owner of Chelsea FC, Abramovich is well known as one of the richest men in the world, with an estimated fortune of £11.7bn.

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