An audit by the Supreme Audit Agency (BPK) published late last year on the 2005 accounts of nine oil and gas blocks (of a total 80) unveiled some $525 million in questionable claims for government refunds under the cost recovery scheme, according to the newspaper. Citing BPK, the newspaper said the refunds were filed by Total E&P Indonesie, ExxonMobil, Chevron, ConocoPhillips, and CNOOC.

"Items claimed for refund ran the spectrum from a Pinocchio DVD to a complicated chain of transactions often involving drilling," it said. According to the BKP report, such expenses reduced the government share of revenue from the oil and gas sector. In 2005, it said, the government received $19.9 billion net take from the oil and gas sector after paying out $7.68 billion in refunds.

While the compensation for questionable items was small compared to the profit, the BPK stressed the impact of "regulation loopholes and reckless supervision by the oil and gas regulator BPMigas" (OGJ, Mar. 24, 2008, Newsletter).