Drafting of regulation on cost recovery has finished: Minister

The drafting of government regulation on cost recovery has finished and will be soon submitted to President Susilo Bambang Yudhoyono for approval, a minister said.

The regulation will specify cost items that oil and gas production sharing contractors can claim for reimbursement.

"The draft has been completed and will soon be submitted to the president for approval," Minister of Finance Sri Mulyani Indrawati said on Thursday during a hearing with the House of Representatives' Commission VII which among others oversees energy affairs.

The draft regulation stipulates among others that all "indirect taxes", including land tax, regional tax and retribution, will be counted as operating costs, Minister of Energy and Mineral Resources Darwin Zahedy Saleh said during the hearing.

Under the production sharing contract system, the government and contractors share the costs of operation proportionally with their respective production shares. (godang)