A new executive team moves in as Santos cuts costs and restructures

Aerial view of Santos GLNG’s LNG plant under construction at Curtis Island, Gladstone. Supplied.

Santos has appointed a new senior executive team, what it calls its Excom, as the energy giant moves to a new operating model for a low commodity price world.

A short time ago, Santos shares were down 2.7% to $3.92.

The new streamlined Santos will mean more cost-cutting and the consolidation of corporate functions.

“The new model involves a move away from geographic based business units to an asset focused model with strong technical capabilities in our primary business of exploration, development and production of oil and natural gas both onshore and offshore,” says CEO Kevin Gallagher.

These Adelaide-based senior executives make up Santos’ Excom:

  • Bill Ovenden – vice president Exploration, accountable for developing and executing a targeted exploration strategy
  • Brett Woods – vice president Development, accountable for delivering projects, sustaining capital work programs and non-operated assets
  • Vince Santostefano – chief operations officer, accountable for the profit and loss of all our operated producing assets
  • John Anderson – executive vice president Commercial and Business Development
  • Andrew Seaton – chief financial officer
  • Angus Jaffray – executive vice president Strategy and Corporate Services.

Gallagher says the transition to the new model will be an orderly process over the next few months.

“Corporate functions will be consolidated to further reduce costs and improve effectiveness,” he said.

“We will manage our asset portfolio in a manner which delivers value to Santos shareholders.”

Santos, like most resources companies, has been cutting costs, trying to catch commodity prices as they keep falling and make up the shortfall with extra production.

The company has cut its dividends and tied future payouts to profit.

In February it reported a full year loss of $2.7 billion, including impairments of $3.924 billion before tax ($2.761 billion after tax), mainly relating to Cooper Basin gas producing assets, GLNG and Gunnedah Basin.

Underlying net profit was 91% lower than the previous year at $50 million. Sales revenue decreased by 20% to $3.2 billion, primarily due to a 48% drop in the average realised oil price in 2015.

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