Commenting on the Santos announcement that it expects to recognise an impairment of GLNG of approximately US$870 million after tax, predominantly due to lower oil prices, Bruce Robertson, IEEFA Gas/LNG Australasia analyst said:
“Santos is continuing to lose money for its shareholders hand over fist with its Gladstone LNG venture. They are tearing up the wealth of the nation and fleecing domestic gas customers to make up for their losses in overseas markets.
“Since they commenced their investments at Gladstone, share prices for Santos and Origin have crashed because of the lower oil prices and the deepening gas glut. All the while the Australian government is blindly following this loss-making gas industry down the rabbit hole.
“Earlier in the year, IEEFA predicted that Santos had overvalued its Gladstone LNG asset by US$1billion asset. It would appear that investors in Origin and Santos can look forward to further material write-downs in Santos’ GLNG venture and in Origin’s APLNG joint venture.