Santos Cuts 100 Jobs Despite $10bn Investment Program

From The Australian

By Barry Fitzgerald

Santos‘ cost reduction drive in the face of its $10.6 billion investment program over three years has led the group to trim 100 South Australian jobs from its 3200-strong national workforce.

The cuts fall on the Adelaide head office and the central processing facility at Moomba in the Cooper Basin, the group’s historic operating base but one that has become less important as Santos invests in liquefied natural gas projects in Queensland and Papua New Guinea and new oil and gas projects off Australia and overseas.

That investment program cost $3.1bn in 2011 and rises to $3.5bn this year and $4bn next year, primarily due to Santos’ involvement in the LNG projects.

The program remains well funded, with Santos saying last month that it had more than $6bn in funding capacity. Should the oil price average $US100 a barrel between 2013 and 2015 it would have $2.9bn in financing headroom to complete the growth projects. The amount reduces to $1.9bn if oil prices — trading at $US114 a barrel in Asian markets — fall to $US75 a barrel. Santos was at pains yesterday to demonstrate that the job cuts were not related to any financing pressures from cost overruns at both the Queensland and PNG LNG developments, or that the Cooper Basin was being sidelined.

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