24 cost items will not be covered new cost recovery regulation

As many as 24 cost items will not be covered by the government under a new cost recovery regulation currently waiting for President?s approval, Kontan reported Monday.

The government has said that the new regulation is needed to ensure that all the expenses which are not used for operating activities are not covered. Under the production sharing contract (PSC) in oil and gas exploration and production, all expenses for exploration and production are covered by the government.

Director General of Oil and Gas Evita H Legowo, however, refused to comment when she was asked to confirm the existence of the new regulation. ?I am still in Yogyakarta. It is not the right time to talk about the regulation,? she was quoted as saying by the newspaper.

The 24 cost items include personal expenses of workers and contractors of oil and gas blocks, administrative sanctions, depreciation costs, expenses for tax consultants, contractor?s marketing expenditures, spending for community development projects during exploration stage, and training costs for expatriates and acquisition and merger costs. (*)