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Santos takes $1.5 billion write-down on GLNG project

Staff Writer |
Australian oil and gas producer Santos expects to take a pre-tax charge of $1.05 billion after tax against the carrying value of GLNG development in Queensland to recognise the current challenging market environment.

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The company said that the impairment outcome is subject to finalisation of the half year accounts, which will be released on August 19, 2016. It will be a non-cash charge and will not affect the company's debt facilities.

"We are seeing the effects of ongoing constraints on capital expenditure and a softer LNG market," CEO Kevin Gallagher said in the statement. "We are experiencing a slower ramp up in production of GLNG equity gas and the price of third party gas has increased" in Australia, he said.

Santos chairman Peter Coates said the company remained confident in the long-term value offered by the Gladstone project despite the "disappointing" writedown.

"We have decided to adjust our long-term operating assumptions for GLNG to reflect the reality of the current oil price environment," he said.

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