The final chapter in one of early post-Soviet Russia’s most high-profile oil industry shakeups appears to be coming to a close with the largely symbolic pardon of Mikhail Khodorkovsky, former head of Yukos. The company was one of Russia’s largest oil companies by reserves and production during the free-wheeling privatizations of the 1990’s when Soviet state assets were gobbled up in shady deals by powerful businessmen, many of them former intelligence officers, though Khodorkovsky was a banker with Communist Party ties. The trouble reportedly started over a financial dispute involving money from the Soviet Treasury that Khodorkovsky funneled into Yukos and refused to give back when investigated by Putin.

But Khodorkovsky’s greatest missteps were not only challenging Putin politically – which has been widely reported – but negotiating the sale of Yukos with ExxonMobil without the Kremlin’s blessing. Some believe that was the final straw for Putin, who saw the potential sale of Russia’s biggest oil producer to a US-based firm without his approval as an utterly unacceptable personal affront. Khodorkovsky was ripped from his executive role and shipped off to Siberia on what many believe were trumped up charges. Yukos’ most valuable assets – the Yuganskneftegaz field in particular – were swallowed by national oil company Rosneft.

For more on Rosneft and the Russian energy sector, read here, and here.

Supporting political opposition to Putin was clearly a bad idea for anyone, but western international oil companies importantly learned that the Russian oil sector was sacred and ALL deals – even those with private Russian companies – would need to go through the Kremlin. Operating in the Russian oil patch is as much about politics as it is business. It appears ConocoPhillips was paying attention and subsequently approached Putin before striking a deal with Yukos contemporary Lukoil. And after a long absence – except for the Sakhalin 1 operation – ExxonMobil appears to be back in the Kremlin’s good graces, with several major initiatives currently underway with Rosneft.

Putin announced this week at the end of a 4-hour press conference Khodorkovsky will likely be pardoned in the near future. He was scheduled to be released this coming August. Most reports suggest the decision was made to clear up questionable human rights issues ahead of the Winter Olympics being held in Sochi. Several detained Greenpeace activists and two members of a punk rock band will also be released as part of the human rights house cleaning. Khodorkovsky reportedly sent the Kremlin a letter requesting clemency, though his lawyer and family knew nothing of it. Some have suggested a clemency request would be an admission of guilt and that’s why Putin agreed to release him after more than 10 years. There are also reports of Khodorkovsky’s mother being unwell, but whatever the reason for Putin’s change of heart, it’s clear that dealing in the Russian oil sector is a delicate affair where the lines between business and politics are opaque and sometimes non-existent.