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:

Note

2020

2019

Expenses on construction contracts

(1,245)

(1,319)

Employee benefit expenses

4.3.6

(614)

(575)

Vessels operating costs

(378)

(312)

Depreciation, amortization and impairment

(439)

(268)

Selling expenses

(24)

(30)

Other costs

(189)

(153)

Total expenses

(2,891)

(2,657)

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.