All subsoil permits – for mining and gas and oil – are being checked retrospectively to 1994,

said Roman Opimakh, Director of the State Service of Geology and Subsoil, in a speech yesterday. Looking for no-bid and ‘sleeper’ permits, the agency plans to check this year approximately one third of the 2,955 permits. A sleeper license is typically a closed-door, deeply undervalued deal where an investor takes out a permit to prevent a competitor from developing a deposit. Last year, the agency checked 15% of the permits, suspending 162 and submitting 280 for cancellation. Of the nearly 3,000 permits, half are in the hands of state companies or are in Russia-controlled areas. The Economy Ministry has estimated that 48% of subsoil production – or $4.5 billion — is “gray” — lightly taxed or untaxed.