5.3.5Expenses by Nature

Year-on-year, expenses on construction contracts sharply decreased as a result from the market slowdown and the lower activity on the Company’s finance lease project which reached completed stage in 2016 (FPSOs Cidade de Maricá, Cidade de Saquarema and Turritella).

The table below sets out expenses by nature for all items included in EBIT for the years 2016 and 2015:

Information on the nature of expenses




Expenses on construction contracts



Employee benefit expenses




Depreciation, amortisation and impairment



Selling expenses



Other costs



Total expenses



Employee benefit expenses came down during the period following the workforce reduction of approximately 650 positions.

In 2016, the line ‘Other costs’ mainly consists of recurring operating costs for the fleet and non-recurring items, including US$ 22 million addition to non-recurring provision for potential contemplated settlement with Brazilian authorities and Petrobras (please refer to 5.3.1). In 2015, ‘Other costs’ included US$ 245 million for non-recurring provision for settlement in Brazil and US$ 89 million release of accruals for sales consultancy fees.