Santos to cut 200 jobs from eastern Australian business

The company is also considering a number of asset sales in a bid to salvage its balance sheet.

The latest job cuts, mostly at its Adelaide headquarters, come on top of 565 jobs already shed, with the company trying to simplify its eastern Australia business, including the Cooper Basin operations that used to be its core.

About 1,400 employees will remain employed by Santos in SA following the latest cuts. The organisational changes are consistent with the objective of the Company’s strategic review announced in August, to restore and maximise shareholder value. The announcement coincided with Santos reporting an 82 per cent slide in first half profit to $37 million along with the departure of chief executive David Knox. The job cuts are expected to deliver about $100 million in savings across the company’s Cooper Basin activities during the next three years.

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.

Meanwhile the strategic review, announced by the company on August 21, is considering a range of potential asset sales, other transactions and potentially a capital raising. Santos has oil, gas and LNG assets across Australia, as well as in Papua New Guinea, Indonesia and Vietnam.

Santos shares closed down 0.67 per cent to $5.93 against a benchmark index fall of 0.9 per cent.

Bernstein has estimated that Santos needs to reduce its debt by $3.2 billion to about $6.2 billion to retain an investment-grade credit rating, assuming oil prices of about $US50 a barrel.