Financials - Santos

Notes to the Consolidated Financial Statements
for the year ended 31 December 2012
2012 2011
18. Provisions $million $million
Current
Employee benefits 89 84
Restoration 53 46
Remediation 7 3
Carbon 20 –
Other 4 2
173 135
Non‐current
Employee benefits 12 9
Defined benefit obligations (refer note 29) 40 50
Restoration 1,589 1,106
Remediation 5 8
Carbon 6 –
1,652 1,173
Movement in provisions
Movements in each class of provision during the financial year, other than provisions relating to employee benefits, are set out below:
Total restoration Total remediation Total carbon Total
$million $million $million $million
Balance at 1 January 2012 1,152 11 – 1,163
Provisions made during the year 169 3 26 198
Provisions used during the year (23) (2) – (25)
Unwind of discount 45 – – 45
Change in discount rate 273 – – 273
Exchange differences 26 – – 26
Balance at 31 December 2012 1,642 12 26 1,680
Restoration
Provisions for future removal and restoration costs are recognised when there is a present obligation as a result of exploration, development,
production, transportation or storage activities having been undertaken, and it is probable that an outflow of economic benefits will be
required to settle the obligation. The estimated future obligations include the costs of removing facilities, abandoning wells and restoring
the affected areas.
Remediation
Provisions for remediation costs are recognised when there is a present obligation as a result of an unexpected event that occurs outside of
the planned operations of an asset.
Carbon
Provisions for carbon costs are recognised when there is a present obligation to settle the Group’s emissions of carbon dioxide equivalent.
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