4.3.5Expenses by Nature

The table below sets out expenses by nature for all items included in EBIT for the years 2019 and 2018:




Expenses on construction contracts



Employee benefit expenses




Vessels operating costs



Depreciation, amortization and impairment



Selling expenses



Other costs



Total expenses



Year-on-year, expenses on construction contracts increased mainly as a result of higher activity on Turnkey projects. The main projects responsible for the increase of expenses are: 2019 awards of FPSO Liza Unity and FPSO Sepetiba and the initial limited scope awarded for the FPSO Prosperity project.

In 2019, depreciation, amortization and impairment was impacted by a US$16 million impairment of semi-submersible production facility Thunder Hawk and a US$9 million impairment of Deep Panuke MOPU.

Expenses related to short-term leases and leases of low value assets amounted to US$6 million in 2019 (2018: US$4 million).