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:
|
Note |
2019 |
2018 |
|
|---|---|---|---|
|
Expenses on construction contracts |
(1,319) |
(469) |
|
|
Employee benefit expenses |
(575) |
(519) |
|
|
Vessels operating costs |
(312) |
(289) |
|
|
Depreciation, amortization and impairment |
(268) |
(235) |
|
|
Selling expenses |
(30) |
(22) |
|
|
Other costs |
(153) |
(142) |
|
|
Total expenses |
(2,657) |
(1,676) |
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).