$700 Million Megayacht Scheherazade Is Undergoing Refit While Under Arrest

Scheherazade is one of the biggest, most expensive, and most controversial superyachts afloat today, and that in itself is an achievement considering that the luxury segment of the industry is thriving.

Technically a megayacht on considerations of length, it's the 12th privately-owned vessel in the world in both length and volume. With a reported cost between $600 million and $1 billion, it's also among the most expensive, while the association with Russian President Vladimir Putin, believed to be the direct beneficiary, gives it that controversial edge that always attracts attention.

Add the fact that it's a brand new vessel, having been delivered by Lurssen in 2020, and that it boasts the biggest names in the industry as part of the team working on it, and you get a megayacht that's the stuff of legends. Despite the incredible media attention focused on it, Scheherazade remains the industry's biggest secret.

The latest development tracks with what we've learned of Scheherazade so far, though it's still very surprising. The Italian government seized the megayacht in May 2022 as sanctions against Russian oligarchs for their more-or-less-direct part in Putin's war in Ukraine went into effect in the European Union. At the time, the megayacht was docked in Marina di Carrara, Tuscany, having sailed there some months prior in order to undergo maintenance work.

In preparations for sanctions and as a way to evade them, Scheherazade first changed flags, then status (hilariously being declared a "houseboat"), and then the entire crew. Supposed owner Putin had just sailed another one of his superyachts out of Italy in the nick of time before sanctions went into effect, but he struck out with Scheherazade. It was in dry dock and didn't get the chance to sail to third-party friendly waters.

Since then, Scheherazade has been in the custody of the Italian government, with reports sourced in the local media claiming it has cost the Italian taxpayer over $40 million a year in maintenance costs, docking fees, and salaries.

Think of a superyacht like a black hole in which you throw money constantly: you pay whatever the vessel costs to build and then roughly 10% of that value each year in running costs. The more expensive the vessel, the higher these costs, which is why many owners choose to charter it when they're not using it, to cut expenses.

In the case of frozen or seized assets, those running costs are transferred to local authorities, so to the local taxpayer. Authorities are obligated to maintain the vessel in impeccable condition, regardless of whether they're planning to auction it off later. Meanwhile, the owner is deprived of its use, either temporarily or for good.

So, while Italy is paying for Scheherazade to stay put, Scheherazade has been undergoing a refit – or what a makeup guru would call a "glow-up," work that would qualify as an upgrade in terms of enhanced performance and cosmetic changes. Though still a brand-new vessel, the megayacht is getting a makeover despite the fact that it's not going anywhere anytime soon.

The Italian Sea Group confirmed the refit for one media outlet earlier this month, adding that the owner of the vessel is paying for it. On paper, that owner is the former CEO of Rosneft, Eduard Khudainatov, but he is believed to be acting as straw owner for Putin. Khudainatov also claimed ownership of Suleiman Kerimov's 106-meter (348-foot) Amadea and Igor Sechin's 135-meter (443-foot) Crescent, but perhaps more relevant is the fact that he could never afford a vessel like Scheherazade.

Developed as Project Lightning, Scheherazade is 459 feet (140 meters) long and has a volume of 10,167 GT spread across six decks. It's based on a Lurssen naval architecture, with exterior design by Espen Oino and interiors by Francois Zuretti. Official photos of the interior were never published, but some pics leaked last year, showing the kind of opulence and oligarch styling that Putin would probably love, from gold-plated (or maybe even solid gold) TP holders to a tiled dancefloor that lowers to create a pool.

Reports claim that "every screw" on Scheherazade is gold, but we might never know the truth of it. We do know that accommodation on board is for 40 guests and 94 crew, so this is no regular custom superyacht – if there's such a thing. Power for this gigantic vessel comes from twin diesel 8,837 hp MTU engines that take it to a top speed of 20 knots (23 mph/37 kph).

Under the current sanctions against Russian oligarchs, local authorities can’t take money from sanctioned individuals to pay for the upkeep of seized assets. Some exceptions were made in Spain and France, which chose to freeze superyachts until ownership could be established, as opposed to seizing them and being stuck with the bill.

Scheherazade is not frozen but seized, so ownership has been transferred to the Italian government. An exception was still made for the refit to allow the owner to pay for it. Not for everything else, though.