Australia’s Santos suffers A$2.7 billion loss

Australia’s Santos, operator of the GLNG project, reported on Friday a net loss of A$2.7 billion ($1.93 billion) for 2015, after booking A$2.8 billion in impairment charges.

The impairment charges are primarily a reflection of the current low oil price environment and relate to the company’s Cooper Basin gas producing assets, GLNG assets and Gunnedah Basin assets, Santos said in its full-year 2015 report.

Underlying net profit after tax was $50 million, 91% lower than in 2014.

Sales revenue decreased by 20% on the previous year to $3.2 billion, primarily due to the 48% drop in the average US$ realised oil price in 2015, Santos said.

While the average LNG selling price of US$8.94 per mmbtu was 40% lower than the prior year, LNG sales revenue was up over 40% following the start-up of GLNG and “strong performance” from PNG LNG and Darwin LNG.

Santos new CEO, Kevin Gallagher, who took the helm on February 1 said he was confident that the company’s  asset portfolio and “strengthened balance sheet will provide a platform for the company to deliver stable returns to shareholders”.

My priority now is to assess our operations and put in place the right strategy to ensure that Santos is sustainable in a low oil price environment, while positioning the company to take full advantage of rising commodity prices in the future,” Gallagher said.

GLNG project

The US$18.5 billion Santos GLNG project, that recently produced one million tonnes of ‪chilled gas at the plant on Curtis island, has shipped 16 cargoes to date, Santos said.

According to the report, average feed rate to the 7.8 mtpa LNG plant for the fourth quarter was 370 TJ/d, which includes downtime for the planned 2-week shutdown completed during November.

Average feed gas to the plant for the quarter was approximately 50 percent GLNG-owned gas production, with the remaining feed gas supplied from third party and Santos portfolio-purchased quantities.

Train 1, which commenced production in September last year, produced 544,000 tonnes of LNG during the fourth quarter and achieved daily LNG production rates more than 10% above nameplate capacity, Santos said.

Commissioning work on the second LNG train is underway with first LNG expected in the second quarter of 2016.

Santos has a 30% interest in Australia’s GLNG. Other co-venturers include Petronas (27.5%), Total (27.5%) and Kogas (15%).

2016 guidance

Santos said it will maintain 2016 production guidance at 57 to 63 mmboe. However, capital expenditure guidance has been reduced to $1.1 billion.

From 2016, unit production costs will be reported net of LNG plant costs, to better reflect costs per barrel produced in the company’s upstream assets. LNG plant costs will be reported separately, the company said.


Santos said on Friday that its proved plus probable (2P) petroleum reserves were 945 million barrels of oil equivalent (mmboe) as at the end of 2015, 24% lower than 2014.

GLNG proved reserves increased 15% before 2015 production, while proved plus probable reserves were “broadly in-line” with the prior year.

1 Australian dollar = 0.71078 U.S. dollars


LNG World News Staff



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