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PERTH (miningweekly.com) – Oil and gas major Santos would report a noncash impairment charge of $1.6-billion in its 2014 financial results, the company said on Thursday, just days after warning of significant job cuts.
The ASX-listed company said on Thursday that the impairment charges reflected the lower oil price environment and a noncash accounting adjustment that related to the historical book value of the company’s assets.
However, no impairment was reported on the Gladstone liquefied natural gas (GLNG) asset, which was on track for first production in the second half of 2015. The $18.5-billion GLNG project, being developed with joint venture partners Petronas, Total and Kogas, would deliver about 7.8-million tonnes a year of gas.
Santos said in early February that the group was pursuing efficiency and productivity options in the low oil price environment and that these options included reducing its contractor workforce and implementing redundancies.
In December, the oil and gas major announced a 25% reduction in capital expenditure for 2015.