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GLNG identified as an asset Santos may sell

THE GLNG project has been identified as one that Santos might put on the market as it considers selling assets to reduce debt.

Santos chief executive David Knox on Friday flagged his intention to step down, with the company's board announcing it was going to conduct a full strategic review to restore shareholder confidence.

Santos shares are at a 12-year low, down 62% in the past year.

The review announcement has fuelled speculation about which assets the company might sell to reduce its $8.8 billion debt.

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Fairfax reports that Citigroup analyst Dale Koenders identified $10 billion of assets within Santos's portfolio that either did not generate cash or were infrastructure assets, and suggested up to half of those could be sold.

Among those he described as "possible" are the GLNG plant in Gladstone and the Port Bonython pipeline and infrastructure in South Australia.

Santos has already been considering the sale of the pipeline that forms part of its $US18.5 billion GLNG venture, but that process is complicated by its venture partners, which include Korea Gas Corporation, Malaysia's Petronas and French oil major Total.

The company on Friday announced a half-year net profit of $37 million after tax, 82% lower than the previous half.

It said the result reflected significantly lower oil prices and a higher exploration expense.

The average realised oil price was US$60 per barrel for the period, compared to US$115 in the previous first half - a 47% reduction.

Mr Knox said that the company had responded effectively and quickly to the lower oil price environment, delivering significant reductions in costs across the business and improving its productivity.

He will step down as soon as a replacement is found.

Topics:  curtis island gas gladstone industry glng lng santos



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