Latest news with #KevinGallagher
Arabian Post
16 hours ago
- Business
- Arabian Post
Abu Dhabi Bid for Santos Sparks Energy Sovereignty Debate
Santos Ltd's board of directors has endorsed a US $18.7 billion cash offer from an Abu Dhabi-led consortium, pledging immediate relief for stretched gas markets but plunging Australia into a high-stakes national interest conflict. The bid, sponsored by ADNOC's investment arm XRG alongside ADQ and Carlyle, offers A$8.89 per share—a 28 per cent premium to Santos's market value—while assuming A$36.4 billion in enterprise debt. It marks the largest all‑cash takeover ever in Australia. Investors have reacted with caution: Santos shares rallied nearly 11 per cent upon news of the bid but remain significantly below the offer price, reflecting deep concern over regulatory approval. Analysts warn that the deal's fate now hinges on the Foreign Investment Review Board and Treasurer Jim Chalmers, whose approval will weigh economic gain against strategic control of critical energy infrastructure. ADVERTISEMENT Proponents emphasise that ADNOC's financial strength can catalyse development of Santos's undeveloped assets—including Narrabri and shale projects like Beetaloo—and help mitigate an anticipated east‑coast gas shortage by 2027. With ADNOC targeting 20–25 million tonnes per annum of LNG capacity by 2035, acquiring Santos's stakes in Gladstone, Darwin and PNG LNG represents a strategic alignment for both parties. However, a chorus of concern has emerged over the implications for domestic energy sovereignty. The high concentration of export‑oriented gas supply—over 70 per cent in Queensland—raises alarms that ADNOC might prioritise LNG sales over local consumption, deepening east‑coast supply pressures. RenewEconomy warns that 'if ADNOC's focus is primarily on LNG markets, it will likely seek to export as much gas as possible'. Australian Energy Producers, which counts Santos CEO Kevin Gallagher as a board member, has yet to publicly weigh in, but the Australian Energy Market Operator has flagged potential domestic shortfalls by late decade if projects like Barossa and Narrabri are delayed. Political figures are sharpening oversight. South Australia's energy minister, Tom Koutsantonis, invoked state power to oversee licence transfers, while Treasurer Chalmers cautioned that the deal 'would be a big decision' and pledged not to pre‑empt FIRB's findings. Historical precedents include the federal government blocking Shell's bid for Woodside in 2001 and the NSW Ausgrid sale in 2016—illustrating a willingness to restrict foreign control of strategic infrastructure. From Adelaide to Canberra, voices across politics and industry are watching keenly. South Australian Premier Peter Malinauskas stressed that the headquarters and local workforce must be retained; this position is reinforced by new state laws granting oversight over petroleum licence assignments. On the investor side, divergent assessments persist. UBS analysts see ADNOC's deep pockets as a positive, while others like Evans & Partners downgraded Santos stock, suggesting investors might prefer Woodside, citing superior oil market positioning. The bid aligns with Australia‑UAE economic ties following a free trade agreement, yet regulatory scrutiny is expected to be heightened due to the sovereign‑state nature of ADNOC. Approval would mark a milestone in Australia's economic evolution, yet rejection—or imposition of conditions like domestic supply carve‑outs—could serve as a policy catalyst in securing energy infrastructure for public benefit. This takeover bid places domestic energy security at the centre of policymaking, challenging Australia to find balance between foreign investment and safeguarding its energy future.
AU Financial Review
3 days ago
- Business
- AU Financial Review
Kevin Gallagher awaits Santos pay day on his private toilet
Nothing like a non-financial perk to improve job satisfaction. When it comes to maximising these, Santos CEO Kevin Gallagher is among the elite. The Scotsman has attracted a conditional $36 billion offer for the ASX-listed oil and gas company from Abu Dhabi National Oil Company and private equity firm Carlyle. It's yet to get past Jim Chalmers and the Foreign Investment Review Board.
Perth Now
4 days ago
- Business
- Perth Now
‘Levers': Warning over Santos takeover
The South Australian government has warned that any takeover of domestic oil and gas giant Santos by the Abu Dhabi National Oil Company must preserve the state's economic interests, saying it has 'levers' it can pull as the UAE behemoth closes in on control. Santos, which was founded as the South Australia and Northern Territory Oil Search in 1954, has agreed to a $30bn takeover from ADNOC, announcing the 'indicative proposal' to the ASX on Monday morning. Under the deal, XRG, an ADNOC subsidiary, would acquire all of Santos' shares for a cash price of $8.89, which represents a 28 per cent premium on the $6.96 closing price of the company's stock before the announcement. Santos, headquartered in Adelaide, is a jewel in South Australia's corporate landscape, and the prospect of foreign control has already triggered a note of caution from the state's powerbase. The company's vast portfolio includes oil and gas fields in South Australia's Cooper Basin, Western Australia, the Northern Territory, Papua New Guinea and the US. In the three months to March 31 this year, Santos generated about $2bn in revenue. SA Premier Peter Malinauskas said he had spoken with XRG leadership on Monday morning. Santos chief executive Kevin Gallagher at the Moomba carbon capture and storage plant in South Australia with Premier Malinauskas in the background. The South Australian government has expressed caution about the takeover of Santos. Picture – Supplied Credit: Supplied 'The state government's priority at all times is to ensure that South Australian jobs remain in South Australia and to maintain Santos' headquarters in Adelaide,' he said after the announcement. 'I spoke today with XRG who briefed me about their plans, and we welcome the opportunity to continue this positive engagement. 'Any judgments we make regarding this process will be made in the state's best interests.' The government has flagged recent changes to the Petroleum and Geothermal Energy Act as a key point of leverage. 'There are levers available to the state government to ensure that the state has a say in this potential takeover and our main objective will be to safeguard Santos jobs and retain its headquarters in SA,' Energy Minister Tom Koutsantonis said. 'Legislation passed by this government ensures that ministerial approval is required for a change in the controlling interest of a licence holder.' ADNOC will need to gain a multitude of approvals for the deal to go through, including from the Foreign Investment Review Board, the Australian Securities and Investments Commission, the National Offshore Petroleum Titles Administrator and from authorities in the US and PNG. Santos workers lay the petroleum liquids pipeline from the Cooper Basin to Port Bonython. The pipeline was built between 1980 and 1983. Santos. Credit: Supplied Treasurer Jim Chalmers will ultimately have to give the deal his tick of approval following advice from the FIRB. 'I will listen very closely, if it comes to it, to the advice of the Foreign Investment Review Board, but I won't pre-empt that advice,' he said in an interview with the ABC on Monday. 'People will have a view. I welcome people expressing their view. I'm unable to because I have to make a decision on this at some stage.' XRG has now been granted exclusive 'due diligence access' to Santos' confidential information as it prepares for a final decision. In a statement, XRG said the bid supported its 'strategy and ambition to build a leading integrated global gas and LNG business'. XRG also said it intended to retain the Adelaide headquarters, the Santos brand and invest in Santos' growth and the development of its gas and LNG business. Alongside its operating assets, Santos boasts the $5.7bn Barossa gas project off Darwin in the Timor Sea, now 95 per cent complete, and the Pikka oil project in Alaska's North Slope. The first gas at Barossa is expected in the third quarter of 2025, while first production at Pikka is scheduled for 2026.
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Business Standard
4 days ago
- Business
- Business Standard
Abu Dhabi's Adnoc makes $19-billion takeover bid for LNG producer Santos
Abu Dhabi National Oil Co. has made an $18.7 billion offer for Australian fossil fuel producer Santos Ltd., in one of the most audacious overseas moves yet by the Middle Eastern company as it seeks to expand its production of liquefied natural gas. Adnoc's investment arm XRG PJSC joins peers including Saudi Aramco in targeting LNG, tapping the potential of one of the fastest-growing fossil fuel markets. It now stands on the brink of a deal that would hand it stakes in major operations in Australia and Papua New Guinea — if it can secure regulatory approvals. Santos Chief Executive Officer Kevin Gallagher has rebuffed several approaches from peers over the last few years, and has come under fire from impatient investors. Now the board of Australia's second-largest fossil fuel producer has recommended Adnoc's cash offer of $5.76 (A$8.89) per share — a 28 per cent premium to Friday's close. 'Credit to Gallagher for extracting such a premium offer – he will have earned the payout of his ensuing incentives in doing so,' Saul Kavonic, an energy analyst at MST Marquee, said in a note. 'Gallagher has found his escape parachute and it's made of gold.' Santos shares closed 11 per cent higher on Monday at A$7.72 a piece. That's the biggest daily jump since November 2020, but the stock remains shy of the Adnoc offer, in large part because of the hurdles that lie ahead, including clearance from the Australian authority that reviews foreign investments. 'It's a great price,' Fereidun Fesharaki, founder and chairman of energy consulting group FGE told Bloomberg TV. 'XRG is a global entity which wants to create a lot of LNG and upstream capability inside the company. My only question is whether Australia's Foreign Investment Review Board will accept this or not, and I think it will be challenging for them to approve it. In the past they have been very reluctant to make these approvals.' Fesharaki added that one option would be to keep the current management and Santos as an independent player. 'If you can convince them that this will function as an Australian company with foreign ownership, they might go along with it,' he added. A spokesman for the Treasury Department said in a statement that foreign investment matters are reviewed on a case-by-case basis to ensure they aren't contrary to national interest or security. Santos boss Gallagher has spearheaded an aggressive investment plan to increase output by about 50 per cent by the end of the decade, which at times had frustrated investors who wanted higher returns instead. That strategy appears to have paid off, ultimately luring in a consortium searching for high growth potential. The consortium led by Adnoc's XRG also includes Abu Dhabi Development Holding Co. and Carlyle Group Inc. XRG has been on the hunt for gas and chemicals deals as it targets an $80 billion enterprise value. 'Adnoc's XRG is paying a premium to enter the global LNG game,' said MST Marquee's Kavonic. 'The proposed transaction is aligned with XRG's strategy and ambition to build a leading integrated global gas and LNG business,' the Adnoc unit said in a statement. The company plans to 'invest in Santos' growth and further development of its gas and LNG focused business,' it said. Santos has long been an attractive target for rivals. In 2018, the Adelaide-based company rejected multiple offers from US-based Harbour Energy Ltd., while talks with Woodside Energy Group Ltd. broke down last year. Bloomberg News reported last year that Adnoc was in the early stages of evaluating Santos as a possible acquisition target as it seeks to ramp up its gas investments overseas. Some investors have urged Santos to split its coveted LNG assets from oil operations in Alaska and its domestic gas business in Australia to cash in on higher valuations. Goldman Sachs Group Inc. and JB North & Co. are acting as financial advisers to Santos; Rothschild & Co. is acting as independent board adviser. The Abu Dhabi consortium has engaged JPMorgan Chase & Co. as its adviser. --With assistance from Keira Wright and Haslinda Amin.
7NEWS
5 days ago
- Business
- 7NEWS
Santos shares blast off on $30b Abu Dhabi takeover bid
Shares in Australian oil and gas giant Santos have rocketed higher after receiving a $30 billion takeover bid from Abu Dhabi National Oil Company and investment giant Carlyle, and the deal has an early blessing from the board. Santos share shot up roughly 15 per cent in early trade after the deal was announced, but have since settled at a 12.4 per cent premium to Friday's close, at $7.83. XRG Consortium, a subsidiary of Abu Dhabi National Oil Company including Abu Dhabi Development Holding Company (ADQ) and Carlyle, made the non-binding proposal to acquire Santos for US$5.76 (A$8.89) per Santos share via an arrangement scheme. The offer represents a 28 per cent premium to Friday's $6.96 closing price, winning the early thumbs up from Santos' board. 'The Santos board confirms that, subject to reaching agreement on acceptable terms of a binding scheme implementation agreement, it intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction,' the board wrote. The consortium will given access to confidential information to conduct due diligence and negotiate the terms and conditions of any potential agreement, which requires regulatory approvals. Abu Dhabi National Oil has expressed interest in acquiring Santos since July 2024, after negotiations of a potential merger between Santos and local competitor Woodside wound up in February 2024. Santos shareholders will not be required to respond to the proposal and there is no guarantee XRG Consortium will enter into a binding agreement. 'Santos will continue to keep its shareholders informed in accordance with its continuous disclosure obligations,' the board wrote. At Santos' annual general meeting last month, chief executive Kevin Gallagher poured water on rumours he was heading for the exit, as he talked up the organisation's performance despite its sliding share price after a year of downtrending oil prices. Santos shares are trading at their highest level since July 2024 on the back of Monday's post-bid rally and a spike in crude prices after attacks between Israel and Iran escalated over the weekend.
