Santos Cuts 100 Jobs from South Australia, Despite $11 Billion in Upcoming Projects

---

Researched by Industrial Info Resources (Perth, Australia)--Santos Limited (ASX:STO) (Adelaide, Australia), Australia's second-largest oil and gas producer, has announced 100 redundancies from its South Australian operations, despite more than $11 billion (AUD $10.6 billion) in the investment pipeline.

The job cuts are focused on office workers at the Adelaide corporate office and at the Moomba Central Processing Facility in the Cooper Basin. For a long time, the 43-year-old Moomba facility has been the company's primary activity centre, but it is becoming less important as Santos begins to focus on liquefied natural gas (LNG) exports at its new Gladstone facility on Curtis Island.

The company has faced criticism that the job cuts were an attempt to rein in operating costs due to the cost blowout of its Queensland LNG and shale gas projects.

The move was tough but necessary to ensure Santos was competitive, said James Baulderstone, the head of the company's eastern Australian business unit.

"This is not a situation where we're pulling back from South Australia--in fact, quite the opposite," he said. "What's happening is that some of the jobs that were for the traditional way of doing things are no longer required. But new jobs and new ways of doing business will continue to be put on as we go through this transformation."

The Moomba plant, Baulderstone claims, would have closed within a decade, if it were not for the company's focus on developing new technologies to ensure the maximum lifespan of the plant. According to Baulderstone, Santos plans to spend more than $800 million upgrading Moomba and building infill wells in old gas fields.

Earlier this year, Santos announced that the cost of building its LNG project has blown out by $2.5 billion over their original estimate of $16 billion, due to increased drilling requirements.

The Gladstone LNG project aims to convert coal seam gas into LNG for export, and is part of Santos' clean energy drive. It sources coal seam gas from the Bowen and Surat basins, then transports it, via a 420-kilometre underground pipe, to a two-train LNG plant on Curtis Island.

Positions facing redundancy at Santos head office are mainly analysts, account managers, engineers and members of the finance department.

Santos currently employs about 3,000 people in eastern Australia, but intends to hire about 500 more staff over the next three years as its LNG and shale gas projects come online.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.