Santos and Carnarvon Energy have gained regulatory approval for the $US2 billion Dorado oil project.Credit: Supplied.
The writedowns were partly driven by the company’s latest review of its assets determining that its Spar-Halyard gas fields in Western Australia would fill with water sooner than expected. Santos said the water ingress would reduce reserves by the equivalent of 26 million barrels of oil,driving $US147 million of the impairments.
It said the audit had also led to a $US181 million before-tax charge related to other “late-life” producing and exploration assets.
“Today’s statement is the result of Santos’ disciplined annual reserves review and accounting processes,which include external audit of approximately 97 per cent of total 2P[proven and probable] reserves,” Santos managing director Kevin Gallagher said.
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Santos’ annual reserves and resource statement is based on an external review of the carrying value of its assets. The company’s proved and probable reserves were a record 1745 million barrels of oil equivalent at the end of 2022,an increase of 171 million barrels.
Also on Tuesday,Santos announced it had gained primary regulatory approval to begin its $US2 billion Dorado oil project off the coast of WA.
“Dorado will provide a welcome boost to Australia’s energy security,while the potential subsequent gas development provides a future source of supply for Western Australia’s domestic market and liquefied natural gas (LNG) projects,” Gallagher said.