4.3.5Expenses by Nature

The table below sets out expenses by nature for all items included in EBIT for the years 2020 and 2019:




Expenses on construction contracts



Employee benefit expenses




Vessels operating costs



Depreciation, amortization and impairment



Selling expenses



Other costs



Total expenses



In 2020, expenses on construction contracts decreased by 6% reflecting the lower activity on Turnkey projects.

Vessel operating costs have increased as a result of Liza Destiny (FPSO) first oil at the end of 2019, additional maintenance costs and costs related to preventive measures implemented as a result of COVID-19.

Depreciation, amortization and impairment was impacted in 2020 by the following non-recurring items:

  • The depreciation of US$(78) million for Deep Panuke MOPU following the end of the lease period;
  • A full impairment of US$(57) million of the SBM Installer installation vessel; and
  • Other impairments of US$(29) million (individually not material) relating to: (i) partial impairment of two units and (ii) increased impairment loss on financial assets.

Expenses related to short-term leases and leases of low value assets amounted to US$5 million in 2020 (2019: US$6 million).

The increase in Other costs is mainly driven by the impact of the 2020 restructuring severance costs of US$46 million.