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Gas giant to cut 200 jobs

Written by on May 15, 2024

South Australian oil and gas giant Santos is cutting 200 jobs, blaming a delay in “growth activities” for the cull.

The ASX-listed $25bn producer announced the retrenchment on Wednesday, with most impacted roles centred in the company’s Perth office.

“A detailed review of the WA, Northern Territory and East Timor business unit was undertaken over recent months to ensure our workforce is aligned to the company’s strategy and disciplined, low-cost operating model,” the company said.

“With some late-life assets nearing closure, there is an increasing near-term focus on capital-intensive decommissioning activities.

“New project approvals are taking longer meaning work programs are more sequenced than in the past and some growth activities have been delayed.

“As a result, approximately 200 roles in the business unit are surplus to our business activity plans including contractors.

“The surplus roles are mainly Perth-based with a small number based in other locations.”

The company’s vast portfolio includes oil and gas fields in South Australia’s Cooper Basin, WA, the Northern Territory and Papua New Guinea.

The company is also pursuing a number of growth projects, including the $5.7bn Barossa gas project off Darwin in the Timor Sea, the $3bn Dorado offshore oil development in WA and the Pikka oil project in Alaska’s North Slope.

But the company has confronted complex regulatory hurdles and legal challenges to its proposed developments, including a long-running court battle over Barossa.

Tiwi Islands Elders took Santos to court over concerns underwater pipelines for Barossa would impact cultural heritage.

The Federal Court ruled in Santos’ favour in January and the project is now more than 70 per cent complete.

Santos said it had not taken the decision to cut jobs “lightly”.

“Santos acknowledges that changes like these are never easy for the people affected, including their families, and we do not make these decisions lightly,” the company said.

“Santos will support impacted employees, including through our Employee Assistance Program and an outplacement service providing career transition support.

“The company will continue to optimise its workforce to ensure it has the right capabilities and is the right size to deliver our business plans safely, efficiently and effectively.”

In its first quarter results for 2024, Santos reported $2.1bn in sales revenue and 21.8 million barrels of oil equivalent.

Chief executive Kevin Gallagher said the Barossa and Pikka developments would set up the company for the next 10 to 15 years.

“Barossa and Pikka are world-class projects that will be transformative for Santos and set the company up with long-term, stable cash flows for the next 10-15 years at least,” he said.

First gas at Barossa is expected in the third quarter of 2025 while first production at Pikka is scheduled for 2026.