Photo by: Bloomberg
PERTH (miningweekly.com) – Oil and gas major Santos this week told shareholders that it was hoping to cut production costs by 10% this year by driving efficiencies and eliminating costs across the business.
In response to the falling oil prices, Santos in December lowered its capital expenditure from $2.7-billion to $2-billion, while growth and sustaining capital for the 2015 year were estimated at $1.4-billion and $600-million respectively.
Chairperson Peter Coates told shareholders at the company’s annual general meeting that in addition to the proactive responses to the lower oil price, the company’s diverse portfolio was also expected to play an important role in mitigating the impact of lower commodity prices.
“Our asset base is capable of providing healthy returns in a range of oil price scenarios. This demonstrates the strength a diverse portfolio can provide. The board and management are working hard to ensure that the company’s entire suite of assets is performing well, delivering their highest production levels in five years,” Coates said.
Santos’s Gladstone liquefied natural gas (LNG) project was expected to produce its first LNG in the third quarter of the year, ultimately bringing the company’s LNG exports to over three-million tonnes a year, up from just the 300 000 t delivered in 2013.
“This will be the company’s most important milestone in realising the strategy we embarked on a decade ago,” Coates said.