Australian company’s write-down of assets relied on optimistic prediction for how oil price will change, according to financial activist group
Santos, one of the companies driving Queensland’s liquefied natural gas export boom, is relying on price projections so optimistic that they inflate the value of the company’s assets by billions of dollars, according to a leading analyst.
This month Santos announced a write-down of the value of its Gladstone gas export project, GLNG, of US$1.5bn. The value of the project dropped because the price it gets for the exported gas is tied to the price of crude oil, which has dropped.
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