Santos Limited, (South Australia and Northern Territory Oil Search) is an Australian oil and gas exploration and production company, with its headquarters in Adelaide, South Australia. It owns liquefied natural gas (LNG), pipeline gas, and oil assets. It is the biggest supplier of natural gas in Australia, with its plants in the Cooper Basin in South Australia and South West Queensland supplying the eastern states of Australia. Its operations also extend to the seas off Western Australia and Northern Territory. It is the 15th largest company in Australia as categorised by Forbes in their 2024 ranking.
The company has been criticised by environmentalists and others for its high level of greenhouse gas emissions, its lobbying of political parties, and various incidents causing contamination. Santos provides sponsorship of several arts festivals and bodies, charities, and the University of Adelaide's Australian School of Petroleum.
History
The company came about after Robert Francis (Bob) Bristowe (1904-1959) and John Langdon Bonython, who had been school friends in Adelaide, partnered with a team of geologists led by Reg Sprigg and Helmut Wopfner tasked with finding oil.
Santos was incorporated on 18 March 1954, with its name an acronym of South Australia Northern Territory Oil Search.[2] Geologist and Antarctic explorer Sir Douglas Mawson, who was appointed to the inaugural board, was responsible for adding "Northern Territory" to the name.[2] Mawson, who had been involved in some early exploration in the Coorong area (1938–1941) and retained a lifelong interest in petroleum geology, resigned very soon afterwards due to ill-health, becoming an honorary consultant to the company.[3] The other inaugural directors were Bonython, who chaired the board; Bristowe; George William Symes; and Henry Simpson Newland.[4] In 1957, the directors included John Jenkinson, Hubert Harvey, and Bob Bristowe.[2]
The core business of the company was initially built on gas discoveries in the Cooper Basin, South Australia, with the discovery and development of the Gidgealpa 2 well in 1963 and Moomba 1 in 1966. It signed supply contracts with the South Australian Gas Company, the Electricity Trust of South Australia and the Australian Gas Light Company, commencing supply in 1969.[2]
After oil was discovered at Tirrawarra, near Moomba, South Australia, in the early 1970s, the company developed its liquid supply operations, which included a plant at Moomba and a fractionation and loading facility at Port Bonython.[2]
In the 1990s, the company expanded, acquiring other companies and developing its operations both onshore and offshore in Australia, Indonesia, Malaysia, Vietnam and Papua New Guinea. Also in this decade it acquired interests in petroleum in the United States and United Kingdom, as well as operations in the Timor Sea and Western Australia.[2] The Ballera gas plant in South West Queensland was established in 1991 and upgraded in 1997.[5][6]
In 2015 Santos began producing LNG, shipping it to South Korea.[2] In August 2018 Santos announced the acquisition of Australian oil and gas company Quadrant Energy for $2.15 billion. As part of the deal, Santos obtained Quadrant's 80% stake in Dorado in the Bedout Basin in northern Western Australia.[7]
In May 2020 Santos completed its acquisition of ConocoPhillips' northern Australia and Timor-Leste assets for US$1.265 billion as well as a contingent payment of US$200 million, which gave Santos control of ageing offshore assets in Bayu-Undan, subsea assets in the Timor Sea, and onshore gas plant Darwin LNG (DLNG), which included the Bayu-Undan to Darwin Pipeline. At the completion of the deal with ConocoPhillips, the interest of Santos in these assets was increased to 68.4%, The sale was contingent on a final investment decision on the future, which once concluded increased Santos' interest in the project to 62.5%.[8][9]
In December 2021, Santos bought Oil Search, the largest oil and gas exploration and development company incorporated in Papua New Guinea, which operated all of the country's oilfields.
Description and governance
Santos is one of Australia's domestic gas and oil producers, supplying sales gas to all mainland Australian states and territories, ethane to Sydney, and oil and liquids to domestic and international customers.[10] It is the biggest supplier of natural gas in Australia,[11] Australia's second-largest independent producer of oil and natural gas, and was slated to become the world's biggest liquefied natural gas (LNG) exporter by 2019.[12] In the 2020 Forbes Global 2000, Santos was ranked as the 1583rd-largest public company in the world.[13]
Santos has its headquarters at 60 Flinders Street, Adelaide. It also has offices in Brisbane, Sydney, Perth and Jakarta.
Operations
The South Australian and Queensland gas reserves are the main sources of natural gas to the eastern states of Australia. Santos is the primary venture partner and operator of natural gas processing facilities at Moomba in SA and Ballera in Queensland, and pipelines connecting those facilities with Adelaide, Sydney, Melbourne, Brisbane, Rockhampton and Mount Isa.
Gas and LNG
Santos has made significant discoveries in the Browse Basin, off the northwest of Western Australia. On 22 August 2014 the company announced a major gas condensate discovery at the Lasseter-1 exploration well in WA-274-P in the basin, in which Santos had a 30% interest in company with Chevron (50%) and Inpex (20%). It was the second major discovery by the company in the area in two years.[16]
On 7 September 2017 Santos pledged to divert 30 petajoules of gas from the Gladstone LNG plant slated for export into Australia's east coast market in 2018 and 2019, as part of efforts to avert government-imposed restrictions on gas exports to solve local gas shortages.
Financial results
Santos' production for 2008 was 54.4 Moilbbl of oil equivalent.[1] Earnings before interest, taxes, depreciation, amortisations and exploration expenses for the period was A$2.8 billion, representing after tax profit of A$1.65 billion.[1] On 22 August 2014 the company said its oil production was at its highest level in six years. For the first half of 2014, Santos recorded sales revenue of $1.8 billion, an increase of 20% on the comparable period the previous year. Sales volumes rose by 5% to 28.9 million barrels of oil equivalent. As a result of the company writing off its investment in a coal seam gas project in Indonesia, the 2014 first-half profit being down 24% at $206 million.[16]
In 2015, Santos' financial troubles became more evident as the share price crashed to one third of its value from the previous year. It hit a 12-year low and has stayed low since. This occurred because of mounting debt and an oil price slump. CEO David Knox was forced to leave, with chairman Peter Coates stepping into the role and leading a strategic review of the gas company. Options of partial asset sale, even takeovers, has been speculated including "No options will be ruled out from consideration, but neither is any particular option a preferred course at this time," Coates said.[29]
Issues
Greenhouse gas emissions
In 2020, Santos was named on a list of Australia's 65 worst greenhouse gas emitting companies.[30] Following additional pressure from ethical investors, Santos announced a goal to reduce greenhouse gas emissions to achieve net zero emissions by 2040 using a combination of carbon capture and storage, renewable energy and offsetting through tree planting programs.[31]
Lobbying and political donations
Santos has engaged Adelaide-based consultancy Bespoke Approach to lobby the Australian Government and the state governments of New South Wales[32] and Queensland.[33]
Incidents
Moomba explosions, South Australia
On 1 January 2004 an explosion occurred at Santos' Moomba processing facility. The blast was traced to the Liquids Recovery Plant (LRP), where an inlet manifold and a related flange weld both failed after corrosion by mercury. Mercury was released along with a cloud of flammable gases including methane, ethane, propane and butane. Workers saw the cloud and raised the alarm, shutting down the plant and evacuating to designated safety points.[38] Some workers allegedly did not hear the emergency alarms.[39] The gas cloud ignited on contact with a heating unit 150 metres away, and an explosion followed. The plant was seriously damaged.[38]
Moomba workers who sought to remain anonymous told The Australian newspaper on 5 January that the company was running a "cowboy" operation, and that it was luck, not management that had prevented any loss of life. They also said that the emergency muster area was too close to the plant in the event of a major tank explosion.[39]
Sponsorship
Santos sponsors many community activities, events, institutions and projects in jurisdictions where they operate commercially. In October 2014, The Advertiser claimed that Santos spends $10 million annually on South Australian community groups, events and institutions.[56] Figures published in Santos' 2014 Sustainability Report state that $7,487,731 was spent on 'Community investment' in South Australia that financial year and $3,108,057 in Queensland. Other jurisdictions received between $5,000 (South Korea) and $775,255 (Western Australia) and the total 'community investment' spent across all regions during 2013–14 was $13,217,617.[57]
South Australia
Recipients of financial support from Santos in South Australia have included:
- Adelaide Symphony Orchestra
- Art Gallery of South Australia[58]
See also
- Moomba Adelaide Pipeline System
Further reading
- Weidenbach, K. (2014): Blue flames, black gold: The story of Santos. Santos Pty Ltc. ISBN 9781921037399
External links
References
- Santos 2018 Full-Year Results Santos, 21 February 2019, retrieved 21 February 2019^
- Our story Santos, 24 September 2015^
- D. M. McKirdy, P. A. Hall, K. Hall. Mawson's archival specimens from the birthplaces of petroleum exploration in Australia and North America: their historical and modern significance Transactions of the Royal Society of South Australia, 2 July 2024^