CANBERRA: Beleaguered Santos will cut 200 jobs at its eastern Australian business unit as it digs deeper to reduce costs. However, it won’t be letting up on its pursuit of asset sales, where some initial deals are expected within weeks.
The latest job reductions, announced to staff on Monday, come on top of the 565 job cuts advised by the debt-laden oil and gas producer at its half-year results in August, when it also embarked on a strategic review to try to restore shareholder value.
Most of the latest round of redundancies from the nearly 3000 staff are understood to be roles based at Santos’ Adelaide headquarters, supporting operations in the Cooper Basin, Northern Territory and Victoria.
Outgoing chief executive David Knox appointed Brett Woods recently as vice-president for eastern Australia, with a specific task to simplify the division and increase production of gas at less expense and without compromising safety.
The oil and gas producer has a target of $180 million in savings across its supply chain by the end of 2015, as it reins in spending after oil prices fell sharply in the second half of 2014. It has also pledged to deliver $100 million in cost savings at its core Cooper Basin activities over the next three years, as part of a plan to ensure it is free cash flow positive in 2016 and beyond even without a recovery in oil prices.
Bernstein Research named Santos in September as among the most aggressive cost cutters in the Asian oil and gas sector, alongside Oil Search and Chinese oil giant CNOOC. It pointed to PetroChina and Sinopec as lagging the pack on addressing costs in the current weak oil price environment.
